Spain has halted reopening the controversial Aznalcóllar mine near Seville following evidence of serious irregularities in the bidding process.
With an estimated 80 million tonnes of ore, the Los Frailes mine was set to restart operations later in this year for the first time since the tailings dam burst disaster in 1998.
After completing a three-way contest, a contract was awarded in February to the Grupo México-Minorbis consortium by the government of Andalusia.
Under the contract, the consortium was supposed to reopen and operate the mine.
A probe was initiated in March following the filing of a complaint in the courts by rival bidder Emerita Resources, accusing the Mexican mining company Grupo México of conducting illegal negotiations, The Guardian reported.
It was also believed that the company was engaged in allegations of bribery.
Patricia Fernández Franco, the judge heading the investigation, criticised the regional authorities for awarding the contract despite knowing the fact that the mine previously caused an ecological disaster.
In April 1998, a holding dam burst at the Los Frailes mine and released up to five million cubic metres of acidic mine tailings.
The tailings are said to have contained hazardous levels of several heavy metals, and quickly reached the nearby River Agrio, and then its affluent the River Guadiamar.
Remediation measures cost about €240m and took three years to complete.
Owned by Boliden-Apirsa, the Los Frailes mine produces about 125,000t of zinc and 2.9 million ounces of silver annually.