Four Grosvenor employees suffered significant burns as a result of the explosion at the mine on May 6 and are recovering in hospital in Brisbane. A fifth worker who was involved with the incident is said to be in good condition.
Opposition mines' spokesman Dale Last said Lynham should take responsibility for the state's poor coal mine safety record and resign.
"This minister promised that he would fix the safety issues in our mining sector," Last said.
"We've had legislation in Parliament, we've had the Brady Report, two University of Queensland commissioned reports released this year and still we're seeing these incidents occur in central Queensland.
"That's not good enough.
"If this minister cannot deliver the safety standards and improvements that are required in the resource sector, then he should fall on his sword."
The proposed inquiry would seek to get to the bottom of the tragedy, which revolves around a friction event at the tailgate end of the longwall that set off dangerous levels of methane gas.
Despite a safety reset caused by the high number of fatalities in the state's mining industry over the past 18 months, accidents continue to plague the industry
It is "very tough work and very complex," Palaszczuk said.
"We need to get to the bottom of what happened here."
Lynham said it was "extremely disappointing" to see more workers injured.
"We have seen in the last year or so, the greatest reforms to mining legislation over the last 20 years," he said.
"We had the safety reset and we have had reforms in methane levels and how methane is monitored as well in our mines.
"We have more inspectors on the ground. We are throwing the kitchen sink at this issue. It is extremely disappointing to hear and witness further events occurring."
Lynham said he was seeking comprehensive legal advice on creating a board of inquiry on the Grosvenor explosion.
The last board of inquiry in Queensland into a mine disaster was created after the Moura No 2 explosion in 1994 that killed 11 miners.
"The people of Queensland, the people of Moranbah, and we [the state government] want answers to why this event occurred," Lynham said.
"We demand answers and an appropriate investigation will follow."
A Queensland Mines Inspectorate spokesman said deputy chief inspector Shaun Dobson went to Grosvenor on May 7 as the lead investigator to run the investigation into the gas ignition event.
"The QMI team working on this investigation now includes the lead investigator supported by additional inspectors and a principal investigations officer," the spokesman said.
"This QMI team is working with mine operator Anglo American who is continuing to monitor the atmosphere underground.
"Anglo American are also preparing a risk assessment for a planned safe mine re-entry."
QMI will review the finalised risk assessment and ensure appropriate controls are in place for safe re-entry.
To assist with the ongoing investigation a 3D scanner has been mobilised from SIMTARS and has been taken to site.
The scanner will be used to survey and map the incident scene for further analysis during the investigation.
Chief inspector of coal mines Peter Newman said Anglo American "informed us that there had been an ignition of gas on the long wall face".
"That is the extent of the information to date," he told ABC.
"The mine will remain shut until such time as it's safe for persons to re-enter the mine to undertake the investigation."
According to Newman, mine inspectors had communications with the mine in April.
"Whenever you bring a fresh pair of eyes to an operation there are always recommendations … or directives," he reportedly said in regard to any safety issues at Grosvenor.
"They [Anglo American] are monitoring the gas environment underground.
"Until such time as the monitoring and analysis of those gas readings determine there is a safe environment for people to return underground, it's premature for me to speculate about what the nature and cause of this was."
Construction Forestry Mining and Energy Union district president Stephen Smyth said employees at Grosvenor had made complains about gas levels and other work practices at the mine.
"My understanding of the concerns is that they have been raised sometimes on a shiftly, daily basis," he said.
Smyth said Anglo American had the worst safety record in Queensland, with the largest number of fatalities of any operator since 2000.
He said the explosion had to be the result of systemic failures.
The Queensland Resources Safety and Health Regulator has started court proceedings against Anglo American over the 2019 death of Bradley Hardwick at its Moranbah North mine in Queensland.
A Queensland Department of Natural Resources, Mines and Energy spokesman said the regulator was alleging breaches of obligations under the Coal Mining Safety and Health Act 1999 in relation to Hardwick's death.
"Hardwick suffered fatal injuries on February 20 2019 when he was struck by a grader he had been operating at the mine," he said.
"The charges have been filed in the Clermont Industrial Magistrates Court."
Smyth was scathing about Anglo American and the severity of the Grosvenor incident.
"Gas ignition is usually like lighting your barbeque - you light it and it goes poof," he told AAP.
"But this was like the whole barbeque exploding.
"That's not very common.
"People might say we are making more of this than what it is, but this was very, very serious, as shown by the injuries of those five men."
Smyth wants Grosvenor workers, some who were casual labour hire workers, to be given whistleblower protections during any investigation into the explosion.
"We know from many years of casualisation in our industry that workers are afraid of retribution if they speak up on safety," he said.
"If we are to get to the truth of this event, they need guaranteed protections.
"Any inquiry must look not only at the procedural and engineering failures that have resulted in this apparent ignition at the longwall face, but also the safety culture when the whole workforce is outsourced and casualised as is the case at Grosvenor."
In Australia five of the past seven incidents resulting in three or more deaths, have been the result of explosions.
High methane levels have dogged Grosvenor from the start as it mines the highly gassy Goonyella Middle Seam.
That seam has proved challenging for Peabody Energy too, with its nearby North Goonyella mine having to be shut after a fire there in 2018.
Methane is the most common fuel involved in coal mine explosions, according to the NSW Mines Rescue "Red Book".
"The emission of this gas from coal seams is largely unavoidable and therefore the aim is to dilute or remove the gas to prevent the formation of a flammable mixture," it states.
"Pre-drainage of coal seams with a high gas content is commonly undertaken to reduce this risk.
"A well designed and properly distributed ventilation system is generally the most effective method for removal of methane once mining has commenced in an area."
The Red Book states the term "frictional sparking" is usually used to cover two distinct forms of spark production: incendive sparking and purely frictional sparking.
"The name ‘frictional ignition' is given to an ignition caused by a spark or a very hot area of stone produced by rubbing or impact of a machine pick during the winning of coal," it says.
"The gas liberated by the fragmentation of the coal, or issuing direct from the seam, becomes ignited by the heat resulting from the fast-moving picks of the machine striking certain types of rock in the roof, floor or face."
The incendive spark is one in which combustion takes place and heat is produced as the particle is being consumed.
The frictional spark is due to heat dissipated by impact and has no inherent source of heat production, consequently the frictional spark is most intense at the moment of impact and cools quickly and progressively afterwards.