A mining company in WA's north-west says it will pursue all legal avenues after the state government unexpectedly denied its application to begin drilling at an iron ore mine neighbouring a renowned national park.

Equinox Resources has announced WA Aboriginal Affairs Minister Tony Buti declined to consent to a Section 18 request that would have allowed the company to begin infill drilling at its Hamersley Iron Ore project.

The proposed mine sits on the doorstep of Karijini National Park, known internationally for its natural beauty and cultural heritage.

Under Section 18 of the Aboriginal Heritage Act 1972 landowners must seek the consent of the Aboriginal Affairs Minister when it is likely an Aboriginal site will be harmed by the intended land use.

Section 18 is the controversial mechanism that allowed Rio Tinto to destroy Juukan Gorge in 2020.

The Aboriginal corporation that manages the land has long campaigned against the mine, alleging it will cause damage to ground and surface water connected to the park's Hamersley Gorge.

Equinox managing director Zac Komur said Dr Buti's decision came as a shock, labelling the minister's decision "legally flawed, unreasonable, and procedurally unfair."

"Equinox Resources is both surprised and disappointed by the minister's decision," he said in a statement to the Australian Stock Exchange.

He said the company had not been made aware of newly-identified cultural sites, and Equinox was "actively seeking clarification" on the new evidence.

Mr Komur said the company would continue to pursue "all available" legal avenues, and has confirmed Equinox will be submitting an application to have the case heard by the State Administrative Tribunal.

He said the decision could have major national implications.

He said decisions like this call into question Australia's standing as a "tier 1 mining jurisdiction".

The WA Department of Mines, Industry Regulation and Safety recently approved the project's program of works.

Mr Komur said the approval would allow the company to continue developing the project.

Aboriginal corporation 'welcomes' unexpected decision

The Hamersley project sits on the Wintawari Guruma native title area which is managed by the Wintawari Guruma Aboriginal Corporation (WGAC).

WGAC and Equinox have been at odds over the mine's development after the Aboriginal corporation raised concerns that the mine could negatively impact heritage sights discovered in the region.

In April an online petition campaigning against the proposed mine garnered more than 15,000 signatures.

WGAC chief operating officer Aaron Rayner said the corporation had been advocating to the minister but did not necessarily expect him to decline the application.

Mr Rayner said the corporation was aware of issues in the application to the minister.

"It's an unusual decision, but a very welcome one," he said.

He said engagement from Equinox was "extremely poor" throughout the application process.

He also labelled claims from Equinox that this decision raised concerns over "sovereign risk" to Australia's GDP as "shrill".

"This decision has nothing to do with sovereign risk in WA," Mr Rayner said.

Mr Rayner said the corporation hoped Equinox would now enact productive engagement, but said its continuing legal efforts meant there was "little prospect" it would do so.

Aboriginal Affairs Minister Tony Buti has been contacted for comment.