Premier Anna Bligh this week said government would prohibit the granting of exploration permits within two kilometres of residential or identified urban development areas.

"Mining will only occur in zones where there is not major residential development," she said.

The move will affect 285 existing exploration leases in Queensland, however Xstrata Mount Isa Mines will not be affected.

Member for Mount Isa Betty Kiernan yesterday confirmed while much of the Mount Isa operations are within two kilometres of the town, any exploration work being carried out is on the mine's existing lease and therefore does not require a new exploration permit from the State Government.

Meanwhile, Ms Bligh said towns of fewer than 1000 people would retain existing provisions that exclude drilling within 100 metres of public properties.

The move has angered rural lobby group AgForce who says the ban on mining around some Queensland towns is cold comfort for graziers and small town residents.

"It seems it is okay to have an exclusion zone of two kilometres around a town, but a farmer can have a coal seam gas well 100 metres from his front door - we don't believe that is fair," AgForce chief executive officer Robert Walker said.

He said the move sent a message that private landowners and remote community would be treated differently.

"The Government needs to deal with all parts of the economy and all parts of the community on a level playing field."

Mr Walker said AgForce was concerned there was no consultation with stakeholders prior to the Premier's announcement.

"The State Government obviously has concerns about mining close to townships, but it shouldn't matter whether there are five people living in a township or five people living in a homestead - these same exclusion zones should apply," Mr Walker said.

AgForce is seeking urgent meetings with the State Government on the issue.