The deal in Queensland was signed by the Wik and Wik Way peoples, Chalco and the local Aurukun Shire Council.

Bauxite reserve

The Chinese company was chosen by state authorities from a list of 10 bidding, to develop the vast bauxite reserves in the first stage of a wider alimunium-making project that Chalco estimates will cost $2.4 billion.

Geologists estimate the Aurukun bauxite reserve ranges in size from 500 million to 650 million tonnes. It takes about four tonnes of bauxite to make two tonnes of alumina. Two tonnes of alumina is used to produce a tonne of aluminium.

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Meeting the concerns of indigenous landowners over royalties and access has long been part of Australia's mining landscape and key to winning development approvals.

Mining companies frequently announce such agreements to assure investors that projects will proceed.

An early blueprint calls for 3,800 construction jobs over three years, including 700 for the mine and washing plant at Aurukun and 3,100 for the refinery. It would also require a permanent workforce of about 600.

Warren Pitt, the government minister for Aboriginal development, said mining the deposit would help secure a prosperous future for the Wik and Wik Way communities.

"This in turn will help reverse the trends of significant economic and social disadvantage, including high unemployment rates, significant health concerns, and a high incidence of alcohol-related violence," he said.

News.com.au reported Neville Pootchemunka, Aurukun’s mayor, as saying the agreement ushered in a new beginning for the community of about 1100 people in Cape York.

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"It's opening the corridors for employment and training enterprise and business. This is an historic milestone for my people."

Nuclear dump

Elsehwere in Australia on Friday the Ngapa clan at Muckaty Station in the Northern Territory agreed a deal where they would lease land to the government where a nuclear waste dump will be built.

The clan will get the land back in 200 years when it is declared safe.

The Ngapa will receive phased payments of $11 million into a charitable trust to benefit traditional owners as part of the deal.

Another million dollars will be provided to enhance education opportunities for Aborigines in the Muckaty Station area.

Julie Bishop, the science minister, said the site would be used to store low and intermediate radioactive waste, including processed fuel rods from the country's only nuclear reactor at Lucas Heights, on the outskirts of Sydney.

However Christine Milne, a member of the senate representing the Green party, said the deal exploited Aborigines and showed Prime Minister John Howard's eagerness to  embrace nuclear power.

"The $12 million deal to pay off the Northern Land Council  is a joke," she told the Australian Broadcasting Corporation.

"This nuclear waste has a half-life of 25,000 years and will be dangerous for more than a quarter of a million years.

"This is the first step to making Australia a global nuclear waste dump. It's Howard's vision for the country."