BHP Billiton Ltd. (BHP.AU) said Friday it has won approval from the New South Wales state government for its planned US$260 million expansion of the Mount Arthur Coal mine.

The company said the project is designed to boost thermal coal output available for sale from the mine to 15 million metric tons a year from 11.5 million tons with operations to commence in the first half of calendar 2011.

BHP president of energy coal Dave Murray said the project is expected to boost the 670 strong workforce at the mine by about a further 190 workers.

Murray said the extra tons from the expansion will be exported through the Newcastle Coal Infrastructure Group development, in which BHP has a 35% stake alongside other Hunter Valley coal miners.

-By Alex Wilson, Dow Jones Newswires; 61-3-9292-2094; alex.wilson@dowjones.com