UPDATE 1-Australia approves Rio Tinto's $1 bln bauxite mine
* South of Embley project could produce up to 50 mln T a year
* Project faces long list of conditions to protect reef
* Rio Tinto shares fall 3.1 pct vs broad market's 0.8 pct drop
SYDNEY, May 15 (Reuters) - Australia approved on Wednesday miner Rio Tinto's $1 billion-plus South of Embley bauxite mine and port project in Queensland after a year's delay due to concerns about ships harming the Great Barrier Reef.
Environment Minister Tony Burke said the project on the Cape York Peninsula could go ahead, subject to several strict conditions that will protect marine life and the Great Barrier Reef from shipping movements.
The South of Embley project could produce up to 50 million dry product tonnes a year of bauxite, which could supply the company's alumina refineries in Gladstone and Yarwun and boost Rio Tinto's bauxite exports.
Major miners are looking to step up bauxite exports to China, whose appetite has risen sharply as it has boosted production of alumina. It takes four tonnes of bauxite to make two tonnes of alumina and one tonne of aluminium.
Rio Tinto said it would comment on the government's approval later on Wednesday. The Anglo-Australian company has long said it would only decide on whether to go ahead with the South of Embley project after receiving all government approvals.
The South of Embley mine is not part of the Pacific Aluminium business that Rio Tinto has put up for sale as it looks to slash its exposure to the weak aluminium market following its badly timed $38 billion takeover of Alcan in 2007.
The conditions imposed by Canberra include stopping feral pigs in the area from attacking turtle nests and devising a plan to track dolphins in the region.
Rio Tinto's shares in Australia were down 3.1 percent at A$55.77 on Wednesday afternoon in a broader market that was off 0.8 percent.
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