Shree Minerals’ contentious Circular Head mine has been rejected in a Melbourne court.
The decision could mean the end for Shree’s Nelson Bay River iron ore mine.
Environmental group Tarkine National Coalition, or Save the Tarkine, had launched an appeal against former federal environmental minister Tony Burke’s approval of the iron ore mine.
The judge made the approval invalid, The Advocate reported.
It is not yet known if Shree Minerals will appeal against Justice Shane Marshall's verdict in Federal Court in Melbourne.
New Environment Minister Mark Butler and Shree Minerals have to appeal within 21 says. A spokesman for Butler said the government was looking into the decision.
"The Minister will carefully consider the court's decision before proceeding further," he said.
Mayor of Circular Head Daryl Quillam expressed disappointment for the region over the decision. The $20 million venture would have employed 70 people.
"This will not only put this mine in jeopardy, but also make other companies such as Venture Minerals apprehensive about their proposed developments," Quilliam said.
Circular Head has faced downturns in the vegetable and forest industries.
The Tarkine National Coalition lodged a case in the Federal Court in April calling on Burke review his decision of approving the iron ore mine.
The Federal Court handed an injunction against Shree Minerals at the proposed mine in May.
The court proceedings began earlier this month.
“We will argue that Minister Burke has not acted in accordance with the provisions of the Environmental Protection and Biodiversity Conservation Act, and as such the approvals granted are invalid,” Jordan said.
Tasmanian Minerals Council CEO Terry Long said the verdict was disheartening for Tasmania.
“It was the federal minister’s intention to approve the project.”
The mining industry is concerned the verdict will deter other mineral investors from Tasmania.
It is understood Tarkine National Coalition were awarded costs.
The group claimed Burke did not bear in mind the impact of the mine on the local Tasmanian devil population.
The group’s campaign coordinator Scott Jordan said it was a ‘great day for the Tarkine and a great day for the Tassie devil’, The Mercury reported.
He added that while environmental groups did not create environmental laws, they would make sure it was enforced.
"It shouldn't be up to environmental groups to force the nation's environment minister to comply with the Act," Jordan said.
"Let's hope the message has been received that it is not OK for Minister's to take shortcuts to push through mining in the Tarkine and if they do the decisions will be challenged."
A pro-mining rally to show support for the mining industry was held in May, drawing over 2000 people in Tullah.
Premier Lara Giddings said the rally was ‘the biggest pro-mining rally ever in Tasmania’.