Waratah lashed out at Garrett late on Friday after the environment minister rejected its Queensland rail and port proposal under the Environment Protection and Biodiversity Conservation Act 1999.

Waratah is proposing to develop a new 25 million tonne per annum coal mine as well as a 500km rail and a new port, worth $A5.3 billion, in Queensland’s Galilee Basin.

The minister, the former face of pro-environment rock band Midnight Oil, said the proposal would have “clearly unacceptable” impacts on the surrounding environment.

“The impacts of the rail line and port facility are simply too great to effectively mitigate, and would destroy the ecological integrity of the area,” Garrett said.

“I have carefully considered the advice from my department on the broader proposal and agree that the plan to run a line through Shoalwater and build a coal port in the location proposed is clearly unacceptable.”

Garrett said he was required by law to protect the environment on Commonwealth land but did not rule out a different proposal being lodged.

“I would encourage Waratah Coal to consider alternative sites for the port,” Garrett said.

Queensland Premier Anna Bligh also weighed in on the debate, stating Waratah needed to look at a different site, according to an ABC report.

Waratah’s rail access corridor sits just inside federal Defence Department land along its Shoalwater Bay southern border.

Waratah chief executive Peter Lynch said he was “extremely disappointed” by the minister’s decision to reject the proposal, saying Waratah believed Garrett had “exceeded his authority” and the decision was wrong in law.

“Waratah does not believe that the proposal has been properly considered or its impacts properly assessed,” Lynch said in a statement to the Australian Securities Exchange on Friday.

Lynch said the proposal should have gone through an environment impact study and had its economic significance assessed.

It has been suggested that when up and running the proposal would generate over $A900 million in royalties for Queensland.

Waratah’s ambitious plans captured the attention of the state government which labelled it a “significant project” for Queensland earlier this year.

Last Thursday Waratah edged closer to defining its Galilee Basin resources at its proposed new mine near Alpha.

The miner completed Stage 1 of its South Alpha drilling program which is designed to up its 500 million tonnes of inferred resource to a measured and indicated status.

Stage 1 of the drilling program was contained within the one freehold tenement at Kia Ora station, which contains the bulk of the resource and is amenable to open cut mining.

If the results of the program are verified the reserves will be converted to proven and probable status.

Waratah has three drill rigs in the south and west of the project area and a further three rigs in the northern tenements.

At Alpha North an inferred resource of 975Mt has already been identified.