The Queensland government is examining the Land Court’s recommendation to reject the $900 million expansion of the controversial New Acland open-cut coalmine.
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.
Land Court member Paul Smith recommended on Wednesday that Mines Minister Anthony Lynham reject the mine's expansion and its environmental authority application.
Mr Smith found despite its long-term economic value, the expanded mine's potentially adverse effect on the groundwater for hundreds of years to come was sufficient to warrant its rejection.
A spokesperson for Dr Lynham said the government was examining the judgment.
In a statement to the ASX, New Hope said it was reviewing the recommendation to determine options available to secure approval of the project.
"(We) will actively progress this project through the final stages of approval," New Hope said.
"We look forward to the Queensland government's timely and favourable decision regarding the future of this operation."
Mr Smith's recommendation came just 12 days after the final written submission in what is the longest hearing in the court's 120-year history.
"I thought it more appropriate to deliver my decision as quickly as possible and live with the consequences of poor drafting," Mr Smith said in his judgment.
"Even if I had taken an additional six months to provide my decision, the outcome would not have changed."
Alliance member Paul King said the recommendation meant farmland on the Darling Downs was now safe.
"This is a victory for the people," said Mr King, who expected the government to now reject the expansion.
"We can win against the biggest of companies to protect our water and our land and our ways of life."
Despite farmers' relief at the judgment, the recommendation brings uncertainty for hundreds of local coalminers, including married father-of-three Michael Hartin.
Mr Hartin, a CFMEU official, said he expected employees would be laid off in the next three to four months.
"A lot of people will have to leave the area, such as myself and my family," Mr Hartin said.
"It clearly shows that a lot of these projects that are in the pipeline are clearly being put in jeopardy by green warfare."
The Queensland Resources Council also expressed its disappointment and surprise at the decision, particularly considering "the rigorous government assessment processes the project has already passed".
"This project is vital to the Darling Downs and would create up to 260 construction jobs and ongoing direct employment of up to 435 jobs and indirectly 2300," the QRC said in a statement.