Australia on Monday approved BHP Billiton's multi-billion dollar plans to expand its copper and uranium operations at Olympic Dam, but said it must comply with more than 100 strict conditions.

Environment Minister Tony Burke said the rules allowing the expansion of the South Australian site would extend beyond the life of the mine which BHP has forecast will generate billions in earnings and create thousands of jobs.

"While I have considered the economic and jobs benefits of this project, my focus has been on protecting matters of national environmental significance," Burke said in a statement.

"The strict conditions I've imposed will help ensure protection of the natural environment, including native species, groundwater and vegetation, for the long-term."

BHP Billiton wants to create a massive open mine pit, which will operate alongside its existing underground mine, to deliver more copper and uranium to meet global demand. It will also expand its processing operations at the site.

Under the government's conditions, the Anglo-Australian miner will be required to establish an offset area of about 140,000 hectares -- eight times the amount of land forecast to be cleared for the project.

It must also contribute to biodiversity conservation priorities.

"The conditions apply to all parts of the project, including the proposed desalination plant in the Upper Spencer Gulf, and will ensure that the gulf and its marine life -- including the giant cuttlefish -- are protected," Burke said.

When the mine is closed, BHP Billiton must cover the tailings storage facility to protect the environment in the very long-term, Burke added.

"The company will be held accountable if it doesn't comply with the strict approval conditions," he said.

BHP Billiton has forecast that the expansion of the site, about 570 kilometres (353 miles) north of Adelaide, will create more than 13,000 jobs and contribute Aus$45 billion (US$45 billion) to the economy over three decades.

The proposal was subject to independent expert reviews, which made recommendations to ensure the development meets world best-practice environmental standards for uranium mining, Burke said.

In August BHP Billiton announced its full-year net profit almost doubled to a mammoth US$23.6 billion, Australia's biggest ever result, citing robust demand from China and India.