The court ruled that the Kores Australia’s development application for the proposed project could not be determined until the mining firm secures approval from the New South Wales Aboriginal Land Council (NSWALC).
The Darkinjung Local Aboriginal Land Council initiated legal proceedings in March claiming that the application does not comply with previously required easement over the council’s land.
Greens MP Jeremy Buckingham said: "This result means the Wallarah 2 mine is unviable and the proposal, which was always unwanted by the local community, should be rejected by the Planning Assessment Commission and abandoned by the proponents."
"Coal mining is in structural decline as the world begins to transition to clean renewable energy. NSW does not need any new coal mines, particularly where they threaten the health of the drinking water catchment," he added.
Kores had planned to use Darkinjung’s site for rail access to transport five million tons of coal per year for a minimum period of 28 years.
Kores Australia spokesman was quoted by The Sydney Morning Herald as saying that the company would continue discussions with Darkinjung to reach an equitable solution for all parties.
"This decision does not affect the current planning assessment process for the project which is being conducted by the NSW Dept. of Planning and Environment," the spokesman added.
The Wallarah 2 application has been under review by the NSW Planning Assessment Commission (PAC) which conducted public hearings in April.
The land council had earlier sought $300m for the rights to use its land.
