New Zealand Tungsten Mining Limited (NZTM) has applied to the Queenstown Lakes District Council for resource consent to drill for the ore, which is used to produce the mineral tungsten.
Using a diesel-powered drill rig that would be carried in by helicopter, the company wants to drill up to 100 holes, up to 12cm in diameter, between 10m and 250m deep.
The company could not be reached for comment, but Department of Conservation (Doc) Queenstown partnerships ranger Chris Hankin said Whakaari was classified as stewardship land, which allowed mineral exploration to be considered.
The company had an exploration permit for the area, and carried out surveys there using hand-held equipment in 2013 and 2014.
It applied to Doc last month for an access arrangement for the latest proposal, which Doc would take several months to assess.
If the company decided to proceed with mining, it would need a mining permit from the New Zealand Petroleum & Minerals agency, new resource consents from the council and a new access arrangement with Doc, Mr Hankin said.
Scheelite was discovered near Glenorchy in 1884, and it is one of three areas in New Zealand where commercial mining has occurred. Tungsten is used as an addition to other metals, particularly for hardening steel.
The Whakaari Conservation Area is popular with walkers, trampers and hunters, and has several Doc huts and a network of old mining roads and tracks.
NZTM's consent application, prepared by Davis Consulting Group, said drilling operations were "not an activity normally anticipated by the public in an Otago conservation area''.
"The operations are likely to generate varying reactions from recreationalists due to the perceived impacts on the visual amenity of the area arising from the presence of a drill rig and the sound generated by drilling operators.''
However, drilling noise would be similar to that of a tractor engine.
The rig and other equipment would be transported by helicopter, except for drilling in the Judah Lode area, which had tracks remaining from the operation of the Judah State Mine until the late 1960s.
Drilling would not occur near sensitive vegetation, and would be a "suitable distance'' from watercourses to ensure runoff was absorbed by vegetation.
An ecologist would check for any breeding activity near drilling sites during the falcon and rock wren nesting season.
