By Christian Mahne in Sydney

All is not well in the Australian state of Queensland.

The mining industry, the backbone of the regional economy, is in trouble because of confusion over laws designed to bridge differences between mining firms and Aboriginal communities.

We've got exploration at the lowest level for 20 years

Queensland Mining Council chief executive

Exploration in the $5bn (�3.3bn) industry has stalled, falling from $90m in 1996 to $35m last year.

The landmark "Mabo" legal decision in 1992 overturned the idea that Australia was empty before the arrival of the first Europeans.

Since Mabo, Aborigine groups have had their traditional rights to the land recognised as "native title", ensuring that developers must negotiate over plans to use such land.

But Queensland's state-level native title legislation has run into trouble.

Legal uncertainty

First, the Australian Senate threw out parts of the original bill. Then a further legal challenge was upheld. The entire Queensland scheme is now in disarray.

"We have a situation in the state at the moment where only some elements of the scheme are potentially operative," said national native title tribunal president Graham Neate.

"Much of the scheme has been declared invalid and indeed many of the exploration and mining interests that have been granted over the last year or two are probably invalid themselves."

Opening a new mine can take 15 years

What the legal uncertainty means in practice is that exploration permits are not being granted.

From an average of 4-500 permits a year issued in the early 1990s, the figure has dropped to fewer than 100 a year.

The last major "greenfield" ore discovery was in 1991.

Yet of the 21 major gold and base metal mines now operating, only one will still be around 20 years from now.

If prospectors are unable to look for new seams, and that it takes 15 years to develop a new find, there are fears how the sector can continue to thrive.

'Stark options'

Michael Pinnock, chief executive of the Queensland Mining Council, said: "Frustration's the word.

Aborigines say the land is sacred

"We all understand the difficulties that government's got with the process. But for the mining industry, we've seen something like 2,000 geologists unemployed now in Queensland.

"We've got exploration at the lowest level for 20 years, and our frustration has been not being able to find a way through this for so long."

"The options as I see it are fairly stark," says Jim McNamara, the civil servant who is Queensland's Director of Native Title Services.

"We can wait the outcome of the appeal that's currently underway and, assuming the result is in our favour, proceed with the system we have in place.

"Or we can abandon the processes we have enacted and go back to the Federal 'right to negotiate' process."

Australia has a Federal Native Title Act that Queensland could revert to if it is forced to abandon its own legislation.

But neither of these options is likely to achieve a quick result.

Meanwhile, the mining industry fears the impasse is bringing it closer to permanent damage.