Horsham Rural City Council has suspended its Memorandum of Understanding (MoU) with mining company WIM Resource, pending further review.
Councillors voted in favour of the suspension during Monday night's meeting, citing the need for a reassessment of the agreement.
The MoU, signed in July 2022, outlined collaboration on the proposed Avonbank Mineral Sands Project at Dooen, should it be granted full Victorian Government approval.
However, growing concerns from landowners and farmers about the mine's environmental and economic impact have prompted the council to reconsider its stance.
The State Government has already approved an Environmental Effects Statement for the 38-year project, which has sparked regional debate over issues such as radiation, dust, and agricultural priorities.
WIM Resource has applied for a mining licence, with community feedback open until April 9.
In addition to suspending the MoU, councillors passed a motion to establish a Mining, Renewables and Energy Committee.
The committee will include at least two councillors, the chief executive, and relevant staff members, with a mandate to review the MoU and provide recommendations to the council.
The terms of reference for the newly established committee will be finalised at a special council meeting.
