Resources company Cougar Energy has confirmed it is appealing against a State Government decision to shut down its trial underground coal gasification plant in the South Burnett region of southern Queensland.

The Government ordered the Kingaroy facility, north of Toowoomba, to close permanently in January after water samples from surrounding bores showed traces of banned chemicals.

Cougar said that the state department of Environment and Resource Management's handling of the situation was flawed and disproportionate, and did not conform to the Environmental Protection Act.

Mr Len Walker MD of Cougar said that some of the traces were the result of lab error and other readings were very minor. He said that "We're talking about very trace levels.” He said that the company cooperated fully with the department's investigation.

The State Government is expected to make a statement on the appeal later today.

(Sourced from ABc.net)