Iluka's application for the grant of a mineral lease, two miscellaneous purposes licences and an extractive minerals lease for mining, processing and associated infrastructure at the Jacinth-Ambrosia development have been approved.

The granting of a mineral lease is for 21 years.

The mineral lease allows Iluka to proceed with applying for various works approvals to commence infrastructure work, including roads, construction of an accommodation village and commencement of other site works, including establishment of water and power supplies.

These activities are expected to commence this year.

Construction and mining activities will be conducted in accordance with a Mining and Rehabilitation Plan (MARP) which is subject to ministerial approvals.

The Mining Lease Application process included the preparation of detailed analyses and environmental assessments encompassing: water, fauna and flora, noise, heritage and socio-economic impacts.

"This is a key milestone for the project. It enables the company to submit a MARP, and upon approval will enable commencement of initial site activities before mining operations commence," said Hans Umlauff, general manager South Australian development and project management.

"Iluka recognises the environmental significance of the area and will conduct its activities in accordance with the high environmental standards necessary.

"The company recognises and appreciates the support of the South Australian Government in achieving this milestone expeditiously and in accordance with the timeframe for project development."

Jacinth-Ambrosia is a major zircon deposit which could produce 2.9 million tonnes of the metal.

The project is expected to have an economic life of at least 10 years and produce over 300,000 tonnes per annum of zircon in the initial years following commissioning and ramp up in 2010.

Iluka's Board has approved capital expenditure for the project of up to $420 million.

The project is expected to directly employ approximately 250 people during the construction phase and approximately 110 people during the operational phase.

District Council of Ceduna Mayor Allan Suter welcomed the development.

"This is really great news for the area," he said.

"It means that operations can really start now. It's just good new all round."

He said the council was happy with the environmental impacts the mine would have, including the increase in truck traffic to Thevenard.

"We're comfortable (with it)," he said.

"We're aware that Iluka are conscious of environmental issues and they're a very community oriented company.

"We're delighted that the last hurdle has been jumped.

He said the company had been "proactive" about employing local people and particularly Aborigines.