PERTH, Feb 12, 2012 (Dow Jones) -- The Australian unit of Alcoa Inc. (AA) on Monday received approval from regulators in Western Australia state for a five year deferral of the proposed multibillion dollar expansion of the Wagerup alumina refinery.

The state's Environmental Protection Authority recommended that the time limit for "substantial commencement" of the Wagerup expansion, to a maximum capacity of 4.7 million tons a year, be extended by five years, the EPA said in a report on its website.

Alcoa of Australia Ltd. needs to provide the EPA with written evidence that it has started work on the expansion by Sept. 14, 2016, otherwise the authorization will lapse, the environmental regulator said.

Alcoa of Australia, which is owned 60% by Alcoa Inc. and 40% by Alumina Ltd. (AWC.AU), stated previously that it has suspended work on the proposed Wagerup 3 expansion until market conditions improve.