Katter's Australian Party parliamentary leader Shane Knuth has slammed Kaga's Baal Gammon zinc mine in Queensland for putting agriculture and tourism at risk.
AAP reports Knuth told Queensland parliament the mine was doing "irreversible" damage to the environment.
He also said Kagara's financial woes would impact any cleanup or compensation payments.
Earlier this year Kagara suspended mining at Baal Gammon in an effort to cut costs and restructure its business.
The company also previously cut 130 workers from its Perth and Queensland operations to stay profitable.
AAP reports QLD environment Minister Andrew Powell said parts of the country around Baal Gammon had not met safe drinking standards for a long time due to natural minerals and historical activities.
Kagara is currently in administration and Powell said the Government was working with officials to determine the future of Baal Gammon.