Australia's Minister for Resources, Energy and Northern Australia Josh Frydenberg participates in a swearing-in ceremony at Government House in Canberra, Australia Thomson Reuters By Byron Kaye

SYDNEY (Reuters) - An Australian royal commission on Monday recommended building a nuclear industry, including a waste dump, in the uranium-rich state of South Australia, propelling the case for overturning long-held opposition to nuclear power.

The recommendation drew broad support from the federal government, and will likely be embraced by nuclear proponents to justify ending decades-long resistance to nuclear energy which has hinged on safety and environmental grounds.

The government "stands ready to work with the South Australian Government if they choose to pursue any new economic opportunities in this area that create jobs and growth", energy and resources minister Josh Frydenberg said in a statement.

The commission's recommendation offers a "sound basis for the South Australian government and the broader community to make informed and considered decisions about South Australia's role in the nuclear fuel cycle", Frydenberg added.

Nuclear advocates have targeted sparsely populated South Australia, with one of the world's biggest uranium deposits, as a home for a nuclear power plant and waste dump, and the state's government began an inquiry into the possibility last year.

The commission urged the state and federal governments to adopt nuclear power generation, to "allow it to contribute to a low-carbon electricity system".

It also recommended South Australia build a government-owned nuclear waste dump, saying the facility could generate A$100 ($73.5) billion for the state over 120 years.

The commission noted that South Australia, known for its vast deserts and producing half Australia's wine, could keep its reputation as a tourist destination but recommended "targeted, informative and fact-based discussions with potentially affected stakeholders" to ease concerns.

The Australian Conservation Foundation (ACF) said the report was "deeply disturbing" and there was not the broad political support that needed to push ahead with the plan.

"The promise of dollar signs seems to have blinded the commission to the known danger signs," said ACF campaigner Dave Sweeney in a statement.

"High-level radioactive waste is a long-term environmental threat, not a short-term business opportunity."

Australia has a third of the world's uranium reserves and in 2015 produced 6,689 tonnes of U308, a common form of yellowcake, or uranium powder, making it the world's third largest producer behind Kazakhstan and Canada, according to the World Nuclear Association.

(Reporting by Byron Kaye; Editing by Robert Birsel)