Minister Geoff Wilson said the permit would let NSW-based Granite Power begin carrying out work in its block near the regional industrial centre of Gladstone.

"The granting of this exploration permit is a significant milestone in the development of geothermal energy industry in Queensland," Wilson said.

"Two other companies, Kuth Exploration and Clean Energy Australasia, have commenced the native title process, the final step before the granting of their exploration permits."

Nine sites across Queensland are earmarked for exploration.