An Oceana Gold (New Zealand) application to purchase land 178ha of rural land for a new tailings reservoir near Waihi has been declined.

Land Information Minister Eugenie Sage and Associate Finance Minister David Clark considered the application under the Overseas Investment Act, and formed different views as to whether the "substantial and identifiable benefit" to New Zealand test in the Act was met.

If ministers form different views, the act states that the application must be turned down.

Sage did not believe using productive rural farmland to establish a long-term tailings reservoir of mining waste created substantial and identifiable benefits.

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Clark believed it would.

The Overseas Investment Office today approved a separate application from Oceana Gold that will allow mining in Waihi to continue through to about 2028.

The Overseas Investment Office proactively released information about the decision on the Land Information New Zealand website.

Advocacy group Coromandel Watchdog of Hauraki has welcomed the application's rejection.

"We agree with Minister Sage that there are far better uses for our productive land than to be used as a dump for toxic waste," spokesperson Augusta Macassey-Pickard said.

"The existing dam was built on productive farmland, that's more than enough area."

She said many toxic sites in New Zealand were abandoned or failed mining dams.

"This is not the sort of legacy that we should be leaving future generations, and it is not the sort of this we should be allowing multinational companies to create and then leave in our country."