The Australian government’s decision to allow the US mining giant Alcoa to continue clearing swathes of Western Australian jarrah forest despite past illegal clearing practices was made in part due to a critical minerals deal reached between Australia and the Trump administration last year, a new document shows.

The document also reveals Alcoa was unlawfully clearing land for its bauxite mining practices in the area south of Perth for 15 years, despite warnings from the federal environment department.

Conservationists have expressed outrage that an “unprecedented” $55m penalty announced by the environment minister was only applied to a six-year period in which the illegal clearing was alleged to have occurred.

Murray Watt said on Wednesday that the penalty – known as an enforceable undertaking – was for clearing that occurred from 2019-2025 in known habitat for nationally protected species without an approval under the Environment Protection and Biodiversity Conservation (EPBC) Act.

When announcing the penalty, Watt said he had granted Alcoa a national interest exemption to allow it to continue clearing in the northern jarrah forest for 18 months while the government considered a proposal for an expansion of the company’s Huntly and Willowdale mining operations to 2045.

But a new document reveals the environment department had been telling Alcoa since 2011 that its mining operations in the forest required approval under Australia’s environmental laws.

A department spokesperson said any clearing before 2019 fell outside the statute of limitations, meaning investigation of or enforcement action “against any earlier unapproved clearing was not possible”.

The document – a statement outlining Watt’s reasons for granting the exemption – shows the minister believed it was justified because of Alcoa’s links to a critical minerals deal reached between Australia and the Trump administration last year that included selling gallium to the US for use in the defence and renewable energy sectors.

Watt also noted the Japanese government and Japanese company Sojitz Corporation were joint venture partners with Alcoa to develop a gallium plant at Alcoa’s refinery at Wagerup and both the Australian and US governments had committed funding and equity to the project.

Watt decided that although the involvement of the US and Japanese governments did not override Australia’s environment laws, the exemption was a means of “reinforcing and giving confidence” to both countries about Australia’s commitment to the project and the critical minerals framework.

Matt Roberts, the executive director of the Conservation Council of WA, said “to learn that Alcoa has been illegally clearing the northern jarrah forest since 2011 is outrageous and an affront to every West Australian”.

“On top of that, the government has prioritised corporate interests and foreign defence interests above the jarrah forests, the endangered species that rely on the forests and Perth’s drinking water – showing just how wrong their priorities are.”

The national interest exemption power has largely been used for emergencies in the past including for activities related to firefighting during this summer’s bushfires in Victoria and the emergency collection and captive management of red handfish threatened by marine heatwaves in Tasmania.

‘It’s staggering’

Georgina Woods, the head of research and investigations at Lock the Gate, called the decision “disgraceful”. She said the document “reveals that the environment minister was essentially told by the mining company that this action was necessary to discharge Australia’s obligations under the critical minerals deal with the United States”.

“This mining company got away with breaking the law for 15 years under successive Australian governments, illegally clearing in a global biodiversity hotspot and then, when it finally admitted it needed some paperwork to continue its destruction, applied for and was granted an exemption to the law within 19 days. It’s flagrant and it’s staggering,” she said.

“In the twisted logic of Australia in the Trump age, the national interest lies not in honouring and protecting the beauty and richness of our natural heritage, but in sacrificing it to foreign mining companies.”

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WA’s northern jarrah forests are home to endangered species including the state’s unique Carnaby’s and Baudin’s black cockatoos.

Alcoa has been mining for decades in the region, with the statement of reasons showing there had been a longrunning dispute between the company and the federal environment department over whether its operations were covered by “continuous use” exemptions from the law for activities predating the commencement of the EPBC Act in 2000.

The document shows the department believed Alcoa’s clearing of the forest for bauxite mining had not been covered by these exemptions since 2011 and required an assessment for their impacts on protected species and ecosystems.

In November last year, the federal parliament passed amendments to the EPBC Act that imposed tougher limits on the use of the continuous use exemptions. Clearing of vegetation older than 15 years would no longer be exempt from assessment and approval under the laws.

After the changes, Alcoa “now accepts that it requires EPBC Act approvals for the Huntly and Willowdale mining operations” and submitted an application for the operations at both mines to be considered through a strategic assessment process, the document states.

On 30 January, Alcoa made an application for a national interest exemption, arguing that without one it would not be possible to continue supplying bauxite to its refineries at Pinjarra and Wagerup and “is in the position of being unable to continue its operations”.

Alcoa argued its application should be accepted to “avoid unintended consequences” of the EPBC reforms and that it would be unable to maintain supply of bauxite without more clearing “and if ongoing supply cannot be maintained this will impact future production of gallium”.

Because the department had told Alcoa its operations were not exempt from the law since 2011, Watt did not accept that the new laws passed last year justified granting the company the national interest exemption.

But he did accept that granting the exemption would be in the national interest because it would “enable mining operations to continue so as to preserve the viability” of the gallium project, which had the backing of the US and Japanese governments.

He said it would help Alcoa to “sustain its operations and its financial viability” while its expansion proposals were assessed and would keep a workforce of about 6,000 people in employment. Watt also decided it would help Australia diversify critical minerals supply for the net zero transition and defence materials.

The department’s spokesperson said it was the department’s view that intensified mining by Alcoa since 2011 required approval.

“The limitations of the Act made resolving this long‑running non‑compliance complex, but these $55 million undertakings deliver a strong and lasting resolution,” they said.

“This case highlights the limitations of the current regulatory framework, where protracted investigations and constrained compliance tools have made enforcement slow and complex.”

They said the recent reforms to Australia’s nature laws “respond to these issues by strengthening the regulator’s ability to act early, act decisively, and prevent long-running non‑compliance from occurring again”.

An Alcoa spokesperson said the national interest exemption would allow the company to “fully modernise our approvals under the EPBC Act” and sustain thousands of jobs. They said the minister’s statement of reasons made clear that “Alcoa and the government have had a difference in position regarding our historical position in relation to our approvals under the EPBC Act”.

“As noted in the statement, our operations pre-date the EPBC Act and Alcoa has continued operations on the basis that certain exemptions under the Act applied,” they said.

“Alcoa has voluntarily entered into agreements (enforceable undertakings) with the government to reconcile this difference of position and importantly the associated investment is for conservation programs and research for the health of the Northern Jarrah Forest.”

The WA Greens upper house MP Jess Beckerling said it was “staggering to read that Alcoa has been clearing illegally since 2011, that the department has been informing Alcoa of its obligations since that time, but that no penalty has been imposed until now”.

“The notion that gallium production for the American military should afford Alcoa a national interest exemption from federal laws is farcical,” she said.

Watt declined to answer specific questions, instead directing Guardian Australia to an interview with ABC radio in Perth this week in which he described the penalty as “an unprecedented amount for a company to pay after undertaking unlawful clearing”.

He told the ABC: “This discussion has been going on between my department and Alcoa for around 10 years” and “there’s been this difference of opinion legally about whether they were required to get approvals or not, and that’s now been resolved as a result of our new laws.”

He said the Albanese government had “beefed up its compliance efforts” and was “prosecuting a lot more people” than previous governments.