Regulators have been notified of allegations that an incident occurred at Kidston Pumped Storage Hydro Project west of Townsville on February 23.
The Construction Forestry and Mining Employees' Union (CFMEU) said explosives were detonated 30m below three night shift workers when they were 300m underground at the renewable energy hub.
They said the workers "felt rumblings" and heard an explosion before they drove back to base and were told the explosives had been set off below them.
CFMEU regional workplace health and safety coordinator Mick Robinson said the workers were uninjured but were "mentally shaken up".
State government regulators Resources Safety and Health Queensland (RSHQ) and Workplace Health and Safety Queensland (WHSQ) have begun investigations.
RSHQ said initial investigations indicated the clearance procedure prior to blasting was "not effective".
It said inspectors were immediately in contact with the site and blasting contractor to make sure conditions were safe to continue work.
"The site suspended blasting operations for two days until interim controls were in place, under the guidance of RSHQ," it said.
"Initial investigations show the clearance procedure that was undertaken to ensure all workers were clear in the tunnelling operations prior to blasting was not effective."
WHSQ said it started immediate inquiries after receiving an anonymous complaint on February 26, formally referring it to RSHQ as the responsible entity.
"Claims that WHSQ have not responded to inquiries or concerns from stakeholders regarding the incident or other issues they have raised are unfounded," a WHSQ statement said.
"Stakeholders have also separately raised concerns with WHSQ about the psychosocial impact of the incident on workers.
"Businesses have a legal requirement to manage any concerns of this nature and, if not managed appropriately, WHSQ will take action as necessary."
Inspectors will travel to the site this week for further investigations.
The Kidston project is a 250MW pumped hydro storage facility built in a disused gold mine that is being developed by Genex Power.
AAP has sought comment from Genex Power.
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