THE size of the indigenous stake in a venture to develop the Aurukun bauxite deposit will be negotiated with traditional owners as a Sydney-based company was yesterday shortlisted by the Newman government.

Aurukun mayor Dereck Walpo said the project would transform the Cape York community from welfare dependence to a “booming mining town”, regardless of which of the five shortlisted companies won the bid to develop the bauxite lode worth up to $20 billion.

Mr Walpo said he would withhold judgment on the plan of indigenous leader Gerhardt Pearson and aluminium smelter entrepreneur John Benson for the start-up company, Australian Indigenous Resources, to develop the mine, under a plan in which traditional owners would hold equity in the venture, rather than merely receiving royalties.

“As mayor I will be negotiating with all of the proponents to ensure the best deal in terms of jobs for our young men and women to get them away from collecting welfare,” he said.

“It is going to change the face of Aurukun in the long run. I think in a few years we will be another booming mining town.”

AIR is planning to now negotiate the indigenous stake in the company and nominate traditional owners to hold board positions, as it prepares its proposal for the government and, if successful, to raise capital for the development of the mine.

Traditional owners have raised concerns about how much equity they would secure in the venture.

It is understood that Mr Benson and Mr Pearson last year offered the local Wik people 40 per cent equity. A further 10 per cent was also proposed to go to Cape York organisations.

Mr Pearson and Mr Benson have since told The Australian no equity would be offered to other indigenous organisations on the pensinsula.

“I can’t yet talk about the size of the stake, but it will be significant and I want to make sure it is right so that we see this opportunity for the local community happens,” Mr Pearson said.

Traditional owner Sharon Ngallanetta said it would be a milestone for the Wik to secure ownership of a mining operation.

“I never thought I would see the day that the Wik would become actual miners,” she said.

Deputy Premier Jeff Seeney yesterday said CHALCO, Rio Tinto, Glencore International and Cape Alumina were also shortlisted and that the lease on the 650,000 tonne deposit might be split to allow AIR to develop a smaller mine alongside one of the multinationals.

A decision on lease will be made early next year.