The South Australian Government has granted a mining lease to Rex Minerals' $800m Hillside copper, gold and iron ore project near Ardrossan on the Yorke Peninsula.
In addition to the mining lease, the government has also provided for power and water corridors, an extractive minerals lease and an associated miscellaneous purposes licence to carry-out mining activities and mineral processing at the site.
Rex Minerals managing director Mark Parry said: "Hillside holds Australia's largest open pit copper ore reserves.
"It has the potential to provide very tangible benefits to the local community creating jobs during construction phase and during its mine life and it is the catalyst for new fresh water and power supplies for the region and new shared infrastructure at Ardrossan.
"More broadly, there is the potential for the state to benefit through increased royalties and taxes over the life of the project."
The Hillside project has previously received consent from the federal government under the Environment Protection and Biodiversity Conservation (EPBC) Act.
The mine, which is located on agricultural lands, is being opposed by the local farmers who fear groundwater and wind contamination in the region.
South Australia Mineral Resources and Energy Minister Tom Koutsantonis said: "The mining lease included a number of conditions, ranging from environmental management to rehabilitation, which will be publicly released once the offer is accepted.
"This mining lease strikes the right balance between environmental and economic priorities.
"The lease approval is a major step towards delivering this project and demonstrates that the Hillside mine can be operated in an environmentally responsible manner."
The mine is expected to create many jobs during its 15-year life.
Rex is required to develop a programme for environment protection and rehabilitation within 12 months and gain approval from the government.
Hillside is the second controversial mine to receive approval in Australia this week. Carmichael coal mine in Queensland was approved despite opposition from environmental groups.