The decision, which MMG confirmed on Wednesday afternoon, followed the environmentalist Bob Brown Foundation and Greens politicians ramping up calls for the company to stop the works.

The works relate to a proposed tailings dam west of the Rosebery Mine and calls to halt them intensified this week in the wake of federal Environment Minister Sussan Ley deciding the tailings project was a controlled action under environmental law.

Her decision meant it would require full assessment under the Environment Protection and Biodiversity Conservation Act.

Hong Kong-listed MMG maintained it had broken no law by performing the preparatory work to date.

"We reject any suggestion we have acted unlawfully and our works at the proposed tailings storage site have been limited to track work without any impact to old-growth forest," it said.

"However, we have been forced to pause our works at South Marionoak whilst we deal with unwarranted legal threats from the Bob Brown Foundation.

"Our current approvals cover this work under state legislation and are necessary for compliance with commonwealth assessments.

"We will continue to work with the government in relation to the approval requirements for the project.

"Our intent has always been to find the most balanced solution for Tasmanians, our 500 employees and the township of Rosebery.

"We believe decisions need to be made based on the best of science and proper analysis and not any one view."

It was not clear how long works would be paused.

MMG on Monday welcomed Ms Ley's decision.

Opponents of the the project argued the decision meant current activities in the area must stop.

MMG in June said its activities at the South Marionoak site had "been limited to upgrading existing access roads built to support historic logging operations across much of the area now under investigation".

"Drilling and geotechnical sampling will take place over the coming weeks."

The company said the mine could not continue beyond 2024 if a new tailings solution was not developed.

Acting mine general manager Steve Scott said an alternative site - not on the mining lease - was being investigated in case South Marionoak did not get environmental approval or its economics did not stack up.

Environmentalists want MMG to choose an alternative site for the development.

The Bob Brown Foundation's seven weeks of protests continued on Wednesday, with a teacher and an artist arrested for shutting down road building work.

"MMG have no intention to leave and neither do we," foundation campaign manager Jenny Weber said, speaking before MMG confirmed the pause to the works.

"MMG is currently building access roads with large quantities of gravel for heavy class vehicles.

"This preparatory work is for an environmental catastrophe in Australia's largest rainforest wilderness.

"Our ongoing protests are calling for urgent protection of takayna/Tarkine and for MMG to use an alternative option for the dumping of their toxic heavy metals waste.

"The company and anti-environment politicians are making ridiculous claims, trying to avoid the facts that this project will be one of Tasmania's biggest environmental impacts in decades.

"If MMG move out of takayna and chose an alternative solution to their tailings waste dump it will not shut down their mine at Rosebery.

"If it were to happen, any shutdown of the mine is the fault of the company after failing to plan for their toxic waste disposal."

Braddon Liberal MHA Felix Ellis said: "It was MMG themselves that initiated a referral to the commonwealth to ascertain if their proposed tailings storage facility should be assessed under the EPBC Act, which has now been determined by the commonwealth."

"This is not unexpected and will now allow the proposal to be assessed under the normal planning and environmental approvals processes, as it should be."