NT land owners sue over mine expansion

A group of traditional land owners has begun legal action against the Northern Territory government over the expansion of the territory's largest zinc mine.

The $110 million expansion, approved by the Northern Territory government in October last year, will turn the McArthur River Mine from underground to open cut mining.

Part of the project by Swiss mining giant Xstrata and its subsidiary McArthur River Mining (MRM) involves diverting the McArthur River, near the Gulf of Carpentaria, by 5.5km.

But in the Northern Territory Supreme Court in Darwin on Monday, lawyer for the traditional owners, Tim Robertson, said the government failed to follow relevant procedures under the Mines Management Act.

He said the action "flies in the face" of what was provided for under the act, and the expansion approval required "fresh authorisation for what is effectively a new mine".

"It required variation of authorisation or required a fresh variation," Mr Robertson told the court.

The legal challenge also includes a failure to provide local Aborigines with natural justice and failure to consider environmental impacts.

"The minister must consider whether to impose a condition relating to the outcomes of the environmental assessment process and if the minister fails to turn his or her mind to that consideration, then in our respectful submission, there is a legal error," Mr Robertson said.

MRM first applied to expand the mine in March but the NT government sent it back to the drawing board to deal with environment concerns.

It then made a number of concessions, including funding an independent environment monitoring process and providing $32 million for a Community Benefits Package.

The company also has to pay a $55.5 million security bond for the first year of development, which will inflate as the environmental fallout increases when the river is finally diverted in 2008.

In separate court action, traditional owners are also taking legal action against former federal environment minister Ian Campbell, claiming he failed to follow proper process under the Environment Protection and Biodiversity Conservation Acts.