Whitianga, July 1 NZPA - A historic agreement on mining on the Coromandel Peninsula is in sight after 11 years of argument and litigation.

Thames-Coromandel District Council, environmental groups, the Mineral Industries Association and the Ministry of Economic Development have reached agreement in principle on new mining rules.

Under the agreement, all mining would be prohibited in and around Mt Moehau on the northern tip of the peninsula and surface mining would be prohibited in coastal areas adjacent to areas classified as outstanding landscapes and in urban and industrial areas.

Surface and underground mining would be zoned discretionary or non-conforming on the rest of the peninsula and companies could apply to operate in these areas.

The agreement represented a compromise over the vexed issue of the council's right to impose a blanket ban on mining on most of the peninsula. Legal action over the ban started in the late 1990s and went through to the Court of Appeal and back to the Environment Court.

The parties will seek consent from the Environment Court for the agreement, which has been hammered out in court mediation sessions.

It involves the council, four environmental groups (Coromandel Watchdog, Tairua Environment Society, Thames Environment Society and the Environmental Defence Society) and the Minerals Industry Association and Ministry for Economic Development.

As a first step, the council last week approved the signing of a memorandum of understanding with the environmental groups, committing itself to carrying out a review of its district plan.

This will see all legal action dropped for the time being but leave the option open for renewed litigation if rules in the council's new district plan aren't acceptable to any of the parties.

The parties will now seek consent from the Environment Court for their agreed course of action.

Thames-Coromandel Mayor Philippa Barriball said she never thought she'd see the day the parties would reach agreement.

"Nobody's happy but they can live with it for the time being. It's not necessarily the end of the road but hopefully, on reflection, the parties will say we've actually got something we can cope with."

The new rules wouldn't necessarily make it any easier for mining, Ms Barriball said.

Any applications for mining would go through the consent process and inevitably end up in the Environment Court.

Minerals Industry Association chief executive Doug Gordon said he was stunned when the agreement was reached.

"I couldn't believe it. It was surreal after all these years."

Each side had to make compromises, Mr Gordon said.

Neither Coromandel Watchdog nor the Environmental Defence Society wished to comment until the agreement had been confirmed.