When questioned yesterday Xstrata Copper North Queensland chief operating officer, Steve de Kruijff did not rule out the mining company challenging the action.

"We are considering our options at this time, however it is not appropriate to comment further on proceedings of this nature at this stage," he said.

DERM's assistant director general Dean Ellwood confirmed yesterday the State Government would be prosecuting the mine in relation to environmental offences.

"The Department of Environment and Resource Management will allege contaminated water was released from the mine following heavy rainfall during last year's wet season," he said.

"It will also be alleged that two cattle properties downstream of the mine site were affected by the discharges as the contaminants in the water in the creek were in excess of acceptable levels for watering stock."

Mr Ellwood said it was the fifth mine in North West Queensland to be prosecuted for alleged environmental offences.

Xstrata was told on Wednesday that the Department of Environment and Resource Management (DERM) would be taking action under the Environmental Protection Act as a result of the discharge into the nearby Gipsy and Eliza creeks.

"DERM was immediately informed of the discharge event and EHM closely monitored the affected areas," the company said in a statement yesterday.

"EHM also undertook a comprehensive environmental investigation into this event and submitted its findings to DERM in August 2009. DERM subsequently advised of its intention to provide a response to this investigation by 30 April 2010."

Following the stormwater discharge events, the company worked closely with its pastoralist neighbours and DERM to assess potential impacts on livestock and the environment, Mr de Kruijff said.