Firm condemns Qld Irwin reserve mining ban

RESOURCE firm Cape Alumina says others will be put off investing in Queensland following the government's decision to ban mining at a northern reserve.

The Wenlock River at the Steve Irwin Wildlife Reserve, Cape York.

A FIRM banned from opening a $1.2 billion bauxite mine on Queensland's Steve Irwin Wildlife Reserve is considering legal action against the state government.

The state's long-term plan for Cape York, released this week, offers the highest protection to the reserve, including banning mining from the area.

Resources company Cape Alumina Limited had resumed planning its Pisolite Hills bauxite mine on western Cape York in October 2012 after the state's co-ordinator-general gave it significant project status.

That status has now been stripped by the government.

The firm's managing director, Graeme Sherlock, says the announcement came as a total surprise and the company is now reviewing all its Queensland operations, including other planned bauxite mines on Cape York.

"We... expected that the future of the project would be determined through a genuine and rigorous environmental assessment process," he said.

The firm went into a trading halt following the announcement but this has since been lifted.

A planned merger between Cape Alumina and MetroCoal Limited has also been scrapped.

Mr Sherlock says the firm, which has spent $20 million on the project, is looking at what options it has to challenge the decision, including taking legal action.

The mine was vital to boosting Cape York's economy and would have provided much needed employment in the area, he says.

Mr Sherlock says the decision may put off other firms investing in projects in Queensland.

The draft 20-year Cape York Regional Plan, which outlines areas deemed suitable for agriculture, tourism and mining, was released for public consultation on Wednesday.

The government says the plan encourages economic growth in the region which will create wealth and jobs for Cape York's indigenous communities while protecting the environment.

However, green groups have warned it will open up vast areas of the pristine peninsula to mining and other developments, damaging culturally and environmentally significant sites.

Gerhardt Pearson, who heads the Balkanu Cape York Development Corporation, welcomed the plan, saying it would create economic opportunities for indigenous communities and firms in the region.