MELBOURNE, Aug 22 (Reuters) - Plans to expand Glencore Plc's GLEN.L McArthur River zinc mine in Australia should be put on hold, subject to a government inquiry to ensure it can be run soundly and its waste rock stored safely, a report released on Monday said.
The call comes following problems at the mine over the past few years, including smoke rising from the waste rock dumps, an acid leak from the tailings storage facility, and lead found in small fish in the McArthur River.
The report by the Mineral Policy Institute, which fights to protect the environment and communities from risky mining practices, said environmental review standards were inadequate in the Northern Territory, where the mine is located.
"There is therefore a clear need to examine possible long-term scenarios for the McArthur River project, and especially the short-term management of waste rock, but critically the suitability of leaving such reactive mine wastes above ground forever," Gavin Mudd, an environmental engineer at Monash University, said in the report.
It called for a government inquiry into the mine's operations and future plans and a detailed review of mine clean-up options, including complete backfill of the pit, which Mudd estimated could cost well over A$800 million ($608 million).
Glencore declined to comment on the report, as it had not seen it and did not know the methodologies used. It said it had not been approached for input or data for the report.
"MRM has made significant progress over the past 24 months in our management and monitoring of waste rock, tailings storage and flora and fauna onsite," it added, in an emailed statement.
The mine is working on an environmental impact statement (EIS) for an expansion when market conditions improve. McArthur River is running at half its capacity to help ease a zinc market glut.
The Northern Territory goes to the polls on Aug 27, with the Labor party expected to oust the Country Liberal Party.
The Labor party said it plans to shift responsibility from the mines department to environmental agencies to strengthen environmental assessments, boost transparency around mine management plans and ensure rehabilitation bonds are adequate.
It has made no commitment to stop the environmental impact statement process for McArthur River.
"If elected, we will take advice from the appropriate agencies before making any decisions around the environmental impact statement," Labor said in an emailed statement. ($1=1.3146 Australian dollars)