Xstrata is trying to quell environmental fears over the expansion of its McArthur River mine in the Northern Territory, following news of a massive diesel spill on site.
ABC News reports Xstrata wants to double the depth and width of the zinc mine to extend its life and increase production.
Earlier this week news emerged Xstrata was facing a maximum $1 million fine following the leak of thousands of litres of fuel from a storage tank last year.
Conservationists have raised concerns about acid mine drainage from the site, and fear the impact it will have on the nearby McArthur River.
Some locals have already complained about mine runoff contaminating the waterway in the past.
According to ABC News the Environment Centre NT has asked Xstrata to prove it has measures in place to avoid contamination of the McArthur River.
The company says the mine's new water management dam will be lined to protect it from leaks and an under-drain system will be designed to catch other leaks.
Xstrata recently announced the re-opening of the Blakefield South coal mine after a fire last year forced its closure.