Contamination confirmed near Palmer's dam

Queensland's environment department has confirmed elevated levels of ammonia in creeks close to Clive Palmer's embattled nickel refinery near Townsville, opening the way for possible legal action.

Environment minister Steven Miles on Wednesday said water samples from Alick and Blind Creeks taken on Monday showed excessive levels of ammonia, consistent with the results of similar tests carried out by Mr Palmer's Queensland Nickel Sales last week.

Queensland Nickel has until March 30 to investigate and provide a report on the contamination and Mr Miles said the government would consider whether any action is required after the report was received.