A landcare group's successful court bid to halt progress on Australia's largest known undeveloped silver deposit has sparked debate over how the decision will impact the mining industry.
The NSW Court of Appeal invalidated Bowdens Silver's planning approval for a lead and silver mine in the NSW central west village Lue on Friday following community opposition and environmental fears.
The company had said the mine, two kilometres from a school, would operate safely and worried locals could take up free lead testing to allay fears of poisoning from dust.
But its project came unstuck over the process to approve construction of a high-voltage power line required for mine operations.
Mudgee Region Action Group said it was delighted with the court decision but felt the responsibility to act should not have rested on the community's shoulders.
"We can't help but feel that it shouldn't fall to community groups like ours to have to spend the time and money we do to hold the (state government and planning commission) to account," the group said.
"The NSW planning legislation for state significant developments is clearly not working and it needs to be fixed."
The decision had immediate ramifications for Bowdens' parent company, ASX-listed Silver Mines Limited.
Its shares plummeted 40 per cent after exiting a trading halt, wiping $90 million from the company's value.
Greens MP and mining spokesperson Cate Faehrmann said the court victory was "massive" win for a community that had taken on the mine for years.
"This is absolutely sensational news for the Lue community, who have been fighting for years to protect their beautiful village from the potentially devastating impacts of a toxic lead and silver mine," Ms Faehrmann said in a statement.
"The community should never have had to wage this battle in the first place ... Anyone with common sense would think that a massive toxic lead mine should not be built within just two kilometres of the local primary school."
The case challenged the NSW Independent Planning Commission's approval of the planned development in early 2023.
The landcare group argued the commission failed to consider the likely environmental impacts of the required power line when considering the development for the mine.
Justice Richard White halted the mining company from carrying out any work on the basis of the initial development consent, which is now void.
He ruled the planning commission's error could not be excused by the fact Bowdens had chosen not to provide the necessary information about the impacts of the power line.
Bowdens said it could not proceed with the project for now but did not give up hope of mining at Lue in future.
It flagged the project would create 320 construction and 220 ongoing jobs.
A Bowdens spokesperson told AAP the company was concerned by "what this decision may mean for the future of the minerals industry in NSW more broadly".
“We are disappointed by the judgment handed down by the Court of Appeal today and will now consider the implications of this decision for the Bowdens Silver Project," the spokesperson said.
A spokesperson for the NSW government said it respects the court’s judgment and is considering the decision.
