SYDNEY: Australia Friday approved coal-miner Yanzhou's takeover of Felix in a deal worth 3.5 billion dollars (3.2 billion US), the country's biggest by a Chinese company and ending months of wrangling.

Assistant Treasurer Nick Sherry set strict conditions for Yanzhou, including operating its Australian mines through an Australian-headquartered company which would be listed on the local stock exchange by the end of 2012.

"The Australian Securities Exchange listing of all of Yanzhou's Australian assets ... is a significant development," Sherry said in a statement.

"It represents the first time a Chinese state-owned enterprise operating in Australia will list on our stock exchange.

"As such, it demonstrates the strength of the developing bilateral economic and investment partnership between Australia and China."

Australia's Foreign Investment Review Board (FIRB) twice ordered Yanzhou to resubmit the takeover bid after it was approved by Felix in August, following 12 months of negotiations.

The deal seemed in doubt after the FIRB's chief told Chinese businessmen he preferred investments below 50 percent for new ventures and 15 percent for big producers, urging more transparency and a less heavy-handed approach to acquisitions.

"This investment also means jobs for Australians, especially in regional areas," Sherry said.

"Yanzhou will continue all four of the Felix mining operations, including completing the development of the Moolarben mine -- this will create more jobs for both New South Wales and Queensland."