An international mining giant has been forced to stop the expansion of its zinc project in the Northern Territory after a court found the process the territory government used to approve it was invalid.
The legal victory by Aboriginal traditional owners in the NT Supreme Court has also thrown into doubt the future of up to 400 employers and contractors working on the development.
Swiss company Xstrata, owner of McArthur River Mine, late last year gained NT government approval to transform its operation from an underground to open-cut mine by diverting a Gulf of Carpentaria river by 5.5 kilometres.
But Justice David Angel on Monday upheld a challenge by the Northern Land Council (NLC), which had argued the NT mines minister failed to follow proper procedures under the Mines Management Act.
It was a decision hailed by opponents as a win for both traditional owners and the environment.
But it meant the company, which has already completed up to 15 per cent of work on the controversial expansion, had to suspend its operations.
“I believe that at seven o’clock last night they shut down or discontinued the mining operations on the area for new development and the diversion associated with the river,” a McArthur River Mining (MRM) spokesman confirmed.
He said MRM was still producing at its underground mine, but was not able to confirm whether the company was pursuing legal avenues.
NT Minister for Mines Chris Natt on Tuesday said the government was receiving detailed legal advice on the court’s findings.
“This decision is based on a technical issue surrounding the initial application form lodged for the McArthur River Mine site in 2002,” he said in a statement.
He said the court had made no findings on the environmental assessment process or consultation with traditional owners or the general community.
Opposition Mines spokeswoman Fay Miller said the government’s error “looks like incompetence”.
“The question is how did this mistake get through an entire department?” she said, adding that 1,700 direct and indirect jobs had now been put at risk and some $13 billion worth of economic benefits over the next 25 years jeopardised.
McArthur River Mining (MRM) first applied in March last year to expand the mine – which contains three per cent of the world’s zinc deposits – claiming an underground mine was no longer viable.
It argued an open-cut mine was the only way to secure the future of the operation, and would extend its life by 25 years.
When the NT government originally rejected its first proposal, MRM threatened to close the mine, prompting regional businesses to launch an advertising blitz to try to change the government’s mind.
Prime Minister John Howard also threw his support behind the expansion, saying it would contribute to the overall wealth of Australia.