PERTH (miningweekly.com) – ASX-listed Cape Alumina went into a trading halt on Wednesday after it was revealed that the development of its Pisolite Hills bauxite project, in Queensland, has again come under threat.

The Queensland government announced plans to declare the Steve Irwin Wildlife Reserve and the Wenlock river on Cape York peninsula as the region’s first-ever strategic environmental area.

“This will be the first of many ecologically sensitive areas across Queensland declared a strategic environmental area,” said Premier Campbell Newman.

“When finalised, this declaration will protect these unique areas from opencut and strip mining, and other activities that risk widespread impacts to their ecological integrity.

“Despite all its green grandstanding, Labor’s Wild Rivers legislation would have allowed mining to occur on the majority of the Irwin’s property, but under the draft Cape York Regional Plan the entire reserve will be protected.”

The Queensland Resources Council said that the second death sentence for the Pisolite Hill project would come as a huge disappointment to indigenous communities and investors.

“In 2010, Cape Alumina’s scientifically robust environmental management plan for mining the Pisolite Hills bauxite resource was rejected under the guise of Wild Rivers legislation and roundly condemned from several quarters as a ‘disaster’ for local aboriginal communities,” said QRC CEO Michael Roche.

“In 2013, the Queensland government is seemingly killing the project with legislation that once more does not appear to have been developed in consultation with Cape York communities.”

Cape Alumina’s interest in the project was reignited in October 2012, after the state government declared the project a “significant project”.

A July 2013 prefeasibility study confirmed that the project could be developed into a 7.5-million-tonne-a-year operation, based on a 134-million-tonne resource. Capital costs for the project were estimated at A$396-million, with the project expected to have a 14-year life.

Cape Alumina’s shares would remain in a trading halt until November 22, or until the company had taken a decision on the future of the project.