Coronation Hill--Wealth Vs. the Environment : Wilderness: The mineral-rich area in Australia, where Crocodile Dundee roamed, has become a classic ecological battleground.

Once the source of Aboriginal myths, a scrub-covered hill sitting on rich seams of gold, platinum and palladium has become a battleground for Australia’s mining industry and environmentalists.

To the mining industry, Coronation Hill near Darwin in the Northern Territory, Australia’s last frontier, offers the potential to earn millions of dollars.

Environmentalists say its position in the unspoiled wilderness of Kakadu National Park, made famous by the film “Crocodile Dundee,” rules out mining at any cost.

The fate of the hill is likely to show how far Australia is prepared to sacrifice wealth for a protected environment.

The issue has become a tricky one for the Labor government, which won an election in March with the support of “green” voters, and is now agonizing over the form of its “ecologically sustainable development” policy.

“For the mining industry, Coronation Hill is an icon. If they can knock down that icon, they will have open house in all national parks,” one environmentalist said.

After the cabinet avoided taking a final decision six months before the election, the government appointed the Resource Assessment Commission to rule on whether Coronation Hill should be mined.

The commission also has to take into account the will of the local Aborigines.

The Jawoyn people consider the hill, which they call “Guratba,” an important sacred site in what they call the Sickness Country. The rugged features of the area are believed to have been created by the mystical being “Bula” in prehistoric times.

Both environmentalists and the Broken Hill minerals company, which holds the site’s mining lease, know the native Australians’ help could swing the commission’s decision. Both sides are courting the tribe’s support.

Broken Hill, Australia’s largest company, says it believes most of the 400 Aborigines “are not opposed to mining at Coronation Hill.”

Darwin environmentalist David Cooper says senior Jawoyn custodians, traditional tribal leaders, oppose any disturbance of the site. But he admits some Jawoyn would welcome the jobs and royalties from a successful mine.

The relative importance of the mine is also in dispute.

Broken Hill, which spent $9 million exploring the site, says Coronation Hill contains a proven 650,000 ounces of gold, 100,000 ounces of palladium and 30,000 ounces of platinum, and is the only mine in the world where all three metals exist in commercial quantities.

Conservationists believe the mine is not a cornucopia of minerals and is not worth the potential damage it could inflict on Kakadu park.

Mining at the hill would be concentrated on a slope bordering the South Alligator River, the main water artery of Kakadu. “The chances of water pollution from the mine or the tailings dam are just too high,” Cooper said.

The area, including Coronation Hill, was mined extensively about 20 years ago for uranium and tin.

A Broken Hill environmental impact study showed a new mine would have no impact on the area surrounding Coronation Hill, which lies in part of the Kakadu park.

Other areas in the park already have World Heritage listing for their beauty. Cooper believes the government’s decision last October to cut by 98% the area zoned for possible mineral exploration could prove vital.

“That decision focused discussion on Coronation Hill, which is only a medium-sized deposit, so they cannot claim mining should be allowed for the national interest,” he said.

In 1986 the government defined a large conservation zone in Kakadu where exploration would be allowed for five years.

But in October, facing a tight election, the government reduced the zone to an area surrounding Coronation Hill, drawing howls of anguish from the mining industry and applause from the conservation lobby.

“The decision to reduce the exploration zone . . . will lock away up to $5.25 billion of resources which Australia can ill afford,” Broken Hill said then.

Both sides are now preparing their submissions to the commission, which opened its hearings last month.

“It is still going to be a win-lose decision, and one side is going to be very unhappy,” Cooper said.