The toxic tailings dam at the Queensland Nickel plant near Townsville is "full" and may have over-flowed, Queensland's Environment Minister Andrew Powell has been told.
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The plant at Yabalu in Halifax Bay, 25 kilometres north of Townsville, is on the coastline and in a Great Barrier Reef World Heritage Area.
The stretch of the Queensland coast around Townsville received between 200mm and 300mm of rain in the past week, according to the Bureau of Meteorology.
"We were advised yesterday that the tailings dam is at full capacity," Mr Powell told reporters in Brisbane on Monday.
"And with the wind and wave action that is generated, there may have been the potential that it has over-topped."
"In that instance, there are other management ponds onsite that may have captured it.
"But we'll have officers on the ground this morning assessing whether or not this has gone offsite."
He said the material in the tailings dam was dangerous to the environment.
"There are a range of contaminants that are formed as part of the nickel refinery process," he said.
"They are really not good for natural water systems and not good for the Barrier Reef."
He said temporarily shutting the plant down was an option for the Queensland government.
"They are the kinds of things that we will be assessing today," Mr Powell said.
"We will be talking to Queensland Nickel, determining what their objectives are and whether they plan to start their operations up after the weekend.
"If that's the case, do they plan to be putting tailings in the dam, a dam that is already at capacity?"
A spokesman for Mr Palmer said there were "other facilities" where material in the tailings dam "could be pumped to".
He said the dam's capacity had been increased since February and "as of yesterday, there was nothing leaking".
In February Mr Powell explained Queensland Nickel risked a $1.1 million fine if it did not upgrade the tailings dam at its Queensland Nickel plant by November.
The tailings dam had 1.6 metres of storage space, however 167mm of rain raised the dam level by 40 centimetres.
Queensland Nickel employs about 1000 people, producing nickel and cobalt for the mining sector from mines in New Caledonia, Indonesia and the Philippines.
