"I think there is an environmental catastrophe in Mount Isa," said lawyer Damian Scattini, who is preparing a test case on behalf of 6-year-old Stella Hare.

Xstrata Copper North Queensland chief operating officer Steve de Kruijff said the company was unaware of any legal action, but took the health of its workers and the nearby community seriously.

"Xstrata is committed to environmental management and improving its environmental performance in Mount Isa," he said on Friday, adding the company had 15 monitoring stations around Mount Isa.

"Often in these situations, the really tricky issue is causation. That is, establishing a convincing causal connection between the exposure and the alleged illnesses," said Peter Cane, professor of law at the Australian National University and a specialist in injuries and compensation,

"This has really become the big major legal issue around what has become known as toxic tort cases," he said.

The town of Mt Isa sits directly adjacent to the zinc, lead, copper and silver mining operation.

Concerns over lead contamination forced another international mining company, Ivernia Inc of Canada, to idle its Magellan lead mine after lead residue was blamed for the death of thousands of birds in far western Australia.

Slater and Gordon also is known for representing people suffering from asbestosis and tobacco-related diseases.

Xstrata acquired the Mount Isa operations, a spawling complex of outback mines and smelters churning up millions of tonnes of copper, lead, zinc, coal and silver after paying more than A$ 3 billion for MIM Holdings Ltd in 2003.

Scattini said he was preparing the case against Xstrata on behalf of the parents of Stella Hare, who has high levels of lead, selenium, cadmium and arsenic in her blood.

"She's got about 10 of them (contaminants), any one of which would be cause for alarm," he said.

"She's having behavioural problems, she's falling behind at school, she's as thin as a rake and won't eat."

A photograph published in Friday's Australian newspaper shows a thin listless child lying across her mother's lap.

Queensland state health authorities have been testing children in Mount Isa for elevated lead levels in their blood and are due to report next month. Last December, authorities said 45 children had high blood-lead levels.

Calls to the Queensland Health agency probing possible contamination in Mt Isa to speak with investigators were not returned.

Xstrata's de Kruijff said the company had substantially improved emissions from its mines in recent years, and said it was working with local authorities to manage lead levels.