SOUTH Australia’s claim to be a mining-friendly state has come under attack from ASX-listed exploration group Argonaut Resources.

It says that more work at its highly rated Torrens copper/gold exploration project has been stopped by Aboriginal heritage issues overriding its approvals to proceed under the state’s best-interest considerations.

Argonaut told the ASX yesterday its approval from the SA government to continue exploration at the Torrens prospect in joint venture with Straits Resources had been overturned following an appeal to the full Supreme Court of South Australia by a group of individuals.

The court held that under the Aboriginal Heritage Act, the relevant minister must delegate his power if requested to do so by duly identified traditional owners. Argonaut said that effectively created a mechanism to veto exploration and mining.

‘‘It would appear this power of veto can equally be applied to non-mining activities such as public infrastructure projects, including those in the metropolitan area,’‘ Argonaut said.

‘‘Significantly, this delegation power rules out the minister being able to assess applications in the broader interests of the state.’‘

Argonaut chairman Patrick Elliott said in a statement to the ASX that the court decision was ‘‘obviously a very disappointing outcome’‘.

‘‘South Australia is the only jurisdiction in Australia with legislation that provides for the mandatory delegation of ministerial powers to traditional owners, thus providing an effective right of veto over any activity,’‘ he said.

“In our case, a site card was lodged and then amended following its initial submission to cover an increased area, including the proposed drill targets at Torrens.’‘

He was referring to the method by which a drilling program by Argonaut/Straits was stopped in its tracks after the completion of three holes by late 2008.

Argonaut said the government had until January 19 to apply for special leave to appeal to the High Court against the Supreme Court decision.

The Torrens joint venture is in a part of SA’s outback known for copper/gold deposits such as Olympic Dam (BHP Billiton) and OZ Minerals’ Prominent Hill and Carapateena