Shares in coal miner New Hope have tumbled after a court recommended the Queensland government reject the company's bid to expand its controversial New Acland mine.
New Hope shares dropped 11 per cent to a two month low of $1.62 following the Queensland Land Court's recommendation that the $900 million expansion be knocked back.
Land Court member Paul Smith found the expanded mine's potentially adverse impact on groundwater for hundreds of years to come was sufficient to warrant the rejection, despite the project's long term economic value.
Queensland's minister for natural resources and mines and the chief executive of the Queensland Department of Environment and Heritage Protection will make a final decision on the expansion, north west of Toowoomba.
New Hope said it is reviewing the land court's recommendation to determine what options it has to secure approval of the project.
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It said the livelihood of its 782 employees and contractors depend on the continuation of the mine, and the approval of the expansion would provide job stability for many years.
Community group Oakey Coal Action Alliance has been fighting to stop New Hope's mine from encroaching on agricultural land, arguing it poses too great a risk to water, air quality and farming business.
Alliance member Paul King said the decision meant farmland on the Darling Downs was now safe.
"This is a victory for the people and we fully expect the Queensland government to follow up on the recommendation and reject this mine expansion outright," he said.
