SYDNEY, April 30 (Reuters) – An Australian court on Monday ruled against a A$110 million ($92 million) redevelopment by Swiss-based mining group Xstrata Plc (XTA.L: Quote, Profile , Research) of the giant McArthur River zinc mine after a challenge by local landowners.
The decision by the Supreme Court of the Northern Territory overturns an earlier ruling giving Xstrata permission to proceed. The court found the government did not follow the correct legal approval process.
Xstrata wants to dig a new underground mine at the mine to replace an ageing open pit operation that is running out of rich ore, requiring the diversion of the McArthur River for 5.5 km (3.4 miles). It was granted permission by the Ministry of Mines to proceed last year after a lengthy legal battle.
“Xstrata has failed at the first hurdle, so this is not just going back into the minister’s office and getting the boxes ticked,” said Charles Roche, a senior campaign officer for the Environment Centre of the Northren Territory.
By James Regan