However, the court also found that the State Government must take climate change into account when considering the approval of new coal mines.

“Contrary to erroneous media reports, the judgement is positive for Centennial because Justice Pain has accepted the arguments of the company and the Director-General that the court should decline to intervene in the approval process by setting aside the exhibition of the EA,” Centennial said today.

Environmentalist Peter Gray commenced proceedings in September this year and was seeking:

A declaration that the view formed by the Director-General of the Department of Planning (that Centennial’s EA adequately addressed the Director-General’s environmental assessment requirements) was void and without effect; and

An order setting aside the decision of the Director-General to place the EA on public exhibition.

The basis for Gray’s claim was that Centennial failed to satisfy the Director-General’s requirement to prepare a “detailed greenhouse gas emission assessment” because the company’s EA did not deal with downstream greenhouse emissions produced as a result of the burning of coal by end users.

Gray said he believes the judgment will require the Government, when assessing new coal mines, to consider their impact on climate change.

"It's brought into perspective the nature of the amended Environmental Planning Assessment Act so it will have many ramifications much beyond the Anvill Hill mine proposal," he told ABC online.

"It's certainly a setback for the process, I think it means a fresh look has to be taken at the mine."

Justice Pain recognised that while a document such as an EA is an important part of the decision making process under Part 3A of the Environmental Protection and Assessment Act 1979, perfection is not required.

“Any ‘imperfection’ that may have existed as a result of not undertaking an assessment of downstream greenhouse gas emissions as part of the EA has since been addressed under the Part 3A process,” Centennial said.

In response to public submissions, Centennial said it had prepared a document that comprehensively deals with the downstream greenhouse gas impacts of the project.

“Centennial has consistently been of the belief we have submitted an environmental assessment that would withstand the rigours of the technical and scientific scrutiny of the Independent Hearing and Assessment Panel and the overall planning assessment process,” Centennial Coal managing director Bob Cameron said.

The area of land which constitutes Anvil Hill has a deposit of approximately 150 million tonnes of thermal coal and the proposed opencut mine will produce up to 10.5Mt of coal per annum for 21 years.

The intended use for the coal is for burning as fuel in power stations in New South Wales and overseas.