Billions of dollars worth of bauxite will stay buried, as the Queensland Government rules against a project proposal.

Plans to develop the large bauxite resource at Aurukun, near Cape York, have been deferred.

The Queensland Government says benefits for local communities were insufficient, and timeframes for project delivery were too long.

The big bauxite lode at the Watson River has been estimated to hold over $25 billion worth of untapped resources.

Talking about its potential last year, Queensland Deputy Premier Jeff Seeney said it development would need to bring with it a vibrant economic future for the Aurukun community and its native title holders.

There was much optimism among the Wik and Wik Way people represented by the Ngan Aak-Kunch Aboriginal Corporation (NAK), as well as the Aurukun Shire Council. 

But now, the leading proposal by Glencore and Australian Indigenous Resources, has been rejected.

“After carefully considering the proposals, the Government is not satisfied that either bid – from the Australian Indigenous Resources Pty Ltd (AIR) or Glencore International AG – could deliver what the Government had hoped for in a timely manner,” Mr Seeney said.

“We have decided to bring this process to a close and revisit this development opportunity at a later date, rather than take a chance that the objectives might one day be satisfied by one of the proponents.”

The Queensland Government says it is still interested in the resource being turned into something profitable, but the recent decision will deal a big blow to the hopes of local in the meantime. .

The Aurukun bauxite development has had a rocky history even before a single shovel has breached the ground.

French aluminium company Pechiney was kicked off the lease in 2003, as the Queensland Government at the time said it was not being developed quickly enough.

Permission was then handed to Aluminium Corporation of China Limited (CHALCO), which spent around $100 million on a related lease but cancelled the $3 billion Aurukun bauxite deal in 2011, saying it would not meet the Bligh government's condition of building a refinery nearby as well