The small island of Niue is opening its doors to mining, with the premier saying he is negotiating a commercial arrangement to explore for gold and copper.

Premier Toke Talagi said he was in discussions with an Australian/New Zealand company, and his government could issue an exploration licence by the end of the year.

"We are basically just negotiating the commercial arrangement before mining long term and doing the final explorations," he said. "If they achieve the quantities that they see as commercially viable, they will look at possible mining."

He did not know the quantity of minerals underground. The government was still weighing the effects it could have on the environment and the tourism sector, which was a priority for Niue.

"We've already offered licences for people to explore in the past. But what we are now doing is looking at the possible issues and not just offering a licence to explore."

People in Niue had mixed feelings about the project. James Magatogia, who works for a government alcohol shop, said people just had to go on to Google maps to see the effects mining could have on land.

"See a satellite view of Nauru - and that's my answer," he said. "All the inside of the island is grey and brown because of mining."

Phosphate mining in Nauru has devastated the island environmentally, with 80 per cent of the island's surface having been strip-mined.

Magatogia said there was nothing wrong with surveying, but he was worried about mining because "Niue is unique and you don't want to ruin it".

Fish and chips shop owner Lynette Kavisi said: "What are they mining for? It's a small place, wouldn't want it to be like Nauru.

"But if it's going to bring in money for the people, I guess it's OK."

Niue is a self-governing state whose people are New Zealand citizens.

- © Fairfax NZ News