A tiny but dangerously radioactive capsule that fell off a truck on a remote Australian outback highway has been found, relieved authorities said Wednesday.

The silver-coloured cylinder -- smaller than a human fingernail -- was recovered by the side of the road near the town of Newman, Western Australia, state emergency services said.

The capsule disappeared from a truck travelling along the Great Northern Highway from a remote mine operated by Rio Tinto to the southwestern city of Perth sometime in mid-January.

Its disappearance went unnoticed until later in the month.

For the last week, vehicles carrying radiation detection equipment have been scouring a strip of Australia larger than the distance between Madrid and Paris, or New York and Chicago.

Although just eight millimetres by six millimetres, it contains enough Caesium-137 to cause acute radiation sickness.

"It's a good result," minister Stephen Dawson told reporters. "It's certainly a needle in a haystack that has been found, and I think West Australians can sleep better tonight."

The capsule is part of a gauge used for measuring the density of iron ore.

It was part of a package picked up on January 12 from Rio Tinto's Gudai-Darri iron ore mine and delivered to the Perth suburb of Malaga on January 16.

But the package was not opened until January 25 when the gauge was found "broken apart" with the radioactive capsule missing. State police were informed the same day.

It was ultimately found a few hours drive from the mine.

'Extremely rare'

On Wednesday a team -- including members of the Australian military -- identified the capsule before loading it into a lead-lined container to shield people from radiation.

It was now been transported to a "secure location" and will begin another journey to Perth on Thursday.

"The site has been surveyed and cleared of any residual radiological contamination," state emergency services said.

Rio Tinto welcomed the capsule's recovery and repeated an earlier apology over the "extremely rare" incident.

"I'd like to apologise to the wider community of Western Australia for the concern it has generated," Rio Tinto Iron Ore Chief Executive Simon Trott said in a statement.

According to the mining giant, the capsule was being transported by a certified contractor when it was lost.

Authorities believe the container it was in collapsed because of vibrations during transportation before it apparently fell through the hole left by a missing bolt.

An investigation into the incident has been launched and penalties are being considered.

Australian Prime Minister Anthony Albanese earlier responded to reports that those responsible for the lost pellet could only face a fine of Aus$1,000 (US$700) under current legislation.

"One, it shouldn't have been lost. That's the first thing, and second -- yeah, of course, that figure's ridiculously low, but I suspect that it's ridiculously low because people didn't think that such an item would be lost."