An iron ore strip mine in Tasmania's disputed Tarkine region has won state environmental approval, further boosting development there.

The region of rainforest, moors and wild coast in the island's north-west is also rich in minerals, and includes some established mines.

Venture Minerals' Riley Creek project is expected to produce two million tonnes of ore from later this year, after the Perth company clears about 500 hectares of eucalypt forest 100 kilometres south-west of Burnie.

The Tasmanian Environment Protection Authority said on Thursday that it had approved the project with a series of conditions, including protection of water quality, and of the endangered Tasmanian devil from roadkill.

Riley Creek is described by the company as important for near-term cash flow as Venture moves to develop other projects in the Tarkine, including its big Mount Lindsay open-cut prospect.