A mechanical failure at a central Queensland alumina refinery has released an unknown amount of chemical waste into a residential area of Gladstone.
Queensland Alumina's refinery in Gladstone is the largest in the world.
The refining process creates the toxic by-product 'red mud', which is stored in nearby dams.
A letter from the company to Gladstone residents advises a gasket at the site failed on Tuesday night.
It says that caused an unspecified amount of the waste material, which appears as a fine red spray, to disperse towards the suburb of Sun Valley.
The by-product can damage paint and appears to be on some windows and cars in small quantities in the residential area.
The company says no-one was injured and it has advised regulatory authorities of the incident.
It says it will not make any further comment until it has informed residents in the affected area.
The Australian Workers Union (AWU) says job cuts at the refinery are to blame for a discharge of toxic waste into a residential area.
AWU spokesman Tony Beers says the company is not investing enough in maintenance.
"Contractors are calling us and they're slashing their workforce and reducing their services on the site as a result of budget cuts, doesn't make plants safer," he said.