Australia's biggest coal mine, the $16.5 billion Carmichael Coal and Rail Project in Queensland's Galilee Basin, has been given federal approval.

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Federal Environment Minister Greg Hunt said the project proposed by Indian company Adani could go ahead, subject to 36 "strict" conditions focused on conserving groundwater.

The mine project west of Rockhampton would be one of the biggest in the world, covering 200 square kilometres and producing about 60 million tonnes of coal a year.

The colossal proposal consisted of six open-cut pits and up to five underground mines, to supply Indian power plants with enough coal to generate electricity for up to 100 million people.

In May, the Queensland Government approved Adani's plan for the giant mine, but was subject to conditions and federal approval.

In giving it the go-ahead with conditions, the Queensland Government sided with Adani against the Independent Expert Scientific Committee (IESC) on coal seam gas and large coal mining developments, set up in 2012 to advise state and federal governments.

The committee said it was mainly worried about the impact of the mine on groundwater in the underlying and adjacent Great Artesian Basin.

It said it had "little confidence" in much of the modelling used by Adani and highlighted gaps in its data.

The IESC said not enough was known about how coal seams connect to the Great Artesian Basin, or the likely effects of mining.

The committee also said it was worried about the cumulative impacts of the Carmichael project when added to other large mining schemes in the area, as well as the risk of flooding and discharges from the mine into creeks and rivers.

Conditions focus on groundwater conservation

Mr Hunt said in a statement the strict conditions for the project's approval were mostly focused on conserving groundwater, such as requiring 730 megalitres of water be returned to the Great Artesian Basin every year for five years.

"These 36 conditions complement the conditions imposed by the Queensland Government, and will ensure the proponent meets the highest environmental standards and that all impacts, including cumulative impacts, are avoided, mitigated or offset," Mr Hunt said.

"A rigorous, open and thorough environmental assessment process was undertaken to take account of the public interest in the project."

Mr Hunt said he had also visited the proposed site to better understand the project and met with the local community to understand their views.

"The project, which was proposed and advanced under the previous state and federal ALP governments, will have a resource value of $5 billion per annum over 60 years," he said.

"At full export capacity, the project is expected to contribute almost $930 million to the Mackay region's gross regional product and $2.97 billion to the Queensland economy each year for the next 60 years."

IESC advice taken into account, Greg Hunt says

The Minister said the project was expected to create 2,475 jobs during construction and a further 3,920 jobs during the operations phase.

"The project has a lifetime resource value of at least $300 billion, and will enhance economic development opportunities throughout the region through indirect employment and training, and contract and supply opportunities," Mr Hunt said.

He added the assessment of the project took into account advice from the Independent Expert Scientific Committee on Coal Seam Gas and Large Coal Mining Development (IESC).

"I personally visited the site with the head of the IESC, and have incorporated all of her suggestions in the conditions," he said.

"Any matters raised by the Independent Expert Scientific Committee were met with further and strengthened conditions, including requirements for a review of the groundwater flow model and measures to protect the Great Artesian Basin."

Minister 'laid out red carpet for coal company'

However, Greenpeace spokesman Ben Pearson said in a statement Mr Hunt had ignored expert advice from IESC against the Adani project.

Sorry, this video has expired Australia's largest coal mine gets Federal approval with conditions ( Chris O'Brien )

"The Federal Environment Minister has laid out the red carpet for a coal company with a shocking track record to dig up the outback, dump on the Great Barrier Reef and fuel climate change," Mr Pearson said.

"Carmichael Mine is set to be one of the largest coal mines in the world and its environmental and climate footprint is equally immense.

"The environmental impact statement of Carmichael Mine reads more like an obituary column than a plan for development."

Greens Senator Larissa Waters said the Federal Government's approval of the mine to export through the Great Barrier Reef was an environmental and climate disaster.

"Off the back of repealing effective action on climate change, the Abbott Government has ticked off on a proposal for Australia's biggest coal mine to cook the planet and turn our reef into a super highway for coal ships," she said in a statement.

"History will look back on the Abbott Government's decision today as an act of climate criminality.

"The Abbott and Newman governments are sacrificing the 63,000 jobs that rely on a healthy reef all for the sake of the private profits of an overseas mining company.

"The notion that anyone will want to buy our coal in 60 years is economic lunacy, so this project is economically foolhardy as well as an environmental disaster.

"Australia should be leading the way on renewable energy rather than condemning India to worse air quality and subjecting the world to more extreme weather disasters."