China Shenhua Energy Co Ltd said it has won approval from the state government of New South Wales in Australia to build a 10 million tonnes a year coal mine, and is awaiting a green light from Canberra to start construction.

Shenhua bought the thermal and semi-soft coking coal project six years ago just before a peak in coal prices, which have since slumped to more than five-year lows.

Winning state approval for the Shenhua Watermark mine, which would be the company’s first new large-scale mine, involved six years of assessments and included modifications in response to concerns raised by farmers. The state has in the past year rejected other coal projects for evironmental reasons.

“Since Shenhua acquired the exploration licence in 2008 we have worked tirelessly to demonstrate the project strikes the right balance to unlock the economic and social benefits of mining while ensuring the valuable agricultural production on the Liverpool Plains continues uninterrupted,” project manager Paul Jackson said in a statement.

The federal approval process is expected to take a few months. The company will then begin work on detailed design and management plans.

“With these elements in place, we are hopeful of commencing construction during 2015-16,” Jackson said.

Coal production would begin towards the end of 2017 at the earliest, a spokesman said.

Source: Reuters (Reporting by Sonali Paul; Editing by Richard Pullin)