The Bald Hill bauxite project, near Campbell Town, has been approved by the Northern Midlands Council.

It will employ 45 people and is expected to extract more than 1 million tonnes of bauxite over five years.

Australian Bauxite's Ian Levy said shipments were expected to being early next year.

"We're hoping in January that we can do some trial test work to make sure that our design is optimum," he said.

"During January we will start earthmoving, during February we'll start shipments of the product down to the port and hopefully we'll get a ship away either in late February or in early March."

The company also plans to mine bauxite, which is used in the production of aluminium, at Conara and in the Fingal Valley.

Mayor David Downie said it was a welcome boost for the region.

"After the demise of the forest industry this is another industry that's being developed and it's creating economic activity," he said.

"It's another business, it's a mine that will be employing a number of people and its activity that's being developed and that's only good for our economy."

Council moves to fill gap from Cornwall mine sackings

The mine approval comes as a nearby mine sheds workers.

The Cornwall Coal Company revealed last month it would be shedding up to 22 staff members through voluntary redundancies.

The Break O'Day Council wants State Government support as it seeks to deal with the fallout.

Mayor Mick Tucker said the economic flow-on in the region would equate to a Launceston employer shedding 250 to 300 employees.

He said the council was working to secure Tasmanian Government support on several projects, including tourism proposals.

"If any opportunity the State Government can help in providing stimulus for Break O'Day, which could help the employees, or any social service network that needs to be supplied, we want to make sure that we've got our hand up, making sure that we're looking after our people," he said.

The council is completing an economic development strategy.

Alderman Tucker said opportunities, like turning the HMAS Tobruk off Skeleton Bay into a shipwreck diving site, could help fill the void.

"We believe that that would have a huge impact on tourism numbers and, of course, all the flow-on effects with employment that would derive from that," he said.