The Queensland Land Court's call for the imposition of stricter environmental requirements upon Gina Rinehart's $6.2 billion Alpha Coal Mine could add further to the woes of the state's beleaguered mining sector.

In its non-binding recommendations for the Queensland government with respect to the Alpha Coal Mine, a multi-billion-dollar joint-venture between Gina Rinehart and Indian conglomerate GVK, state land court member Paul Smith urged that the project be rejected on the grounds of it impact on the local environment and farming sector.

The Queensland land court said that if approval is conferred upon the project, it should be subject to a number of strict requirements, including water monitoring and licensing, as well as the provision of compensation to local graziers should mining activities impact the area’s ground water.

All parties to the dispute over the Alpha Coal Mine have hailed the equivocal decision as a victory.

While GVK Hancock spokesperson, Josh Euler, said that the proposal was tantamount to a conditional approval.

“Today we welcome the recommendation from the Land court to grant the environmental authority and mining lease for our Alpha coal mine, in line with a couple of conditions,” Euler said.

Environmentalists and pastoralists opposed to the mine, however, have also claimed the Land Court decision as a victory on their behalf.

“The judge has clearly stated that the evidence provided to the court in relation to water is unsatisfactory and not in the public interest for this mine to be approved,” said Derec Davies, spokesman for environmental lobby group Coast and Country. “This is an excellent day for Queensland and this is an excellent day for Queensland’s farmers.”

The decision comes at a trying time for Queensland’s coal sector, with miners struggling to turn a profit, and concerns rising over the potential for the rights of Australian farmers to derail resource development projects.

The Queensland Resources Council points out that the state’s coal sector may have entered a profitless production boom, with miners churning out product yet enduring significant losses because commodity prices have fallen below costs.

QRC CEO Michael Roche said that despite Queensland posting record coal export levels in 2013, hitting 196 million tonnes in total for the year, the majority of Queensland coal producers were losing money as a result of the slump in commodity prices.

Further south BHP Billiton subsidiary Illawarra Coal has announced the cutting of 36 staff as part of efforts to shore up efficiency and cut costs in the face of a more difficult market environment.

Concerns are also rising in the Australian mining sector over the very issue that the Queensland Land Court decision sought to address, the rights of farmers vis-a-vis competing resource developments.

Brendan Pearson, chief executive of the Minerals Council of Australia, pilloried a recent agreement struck between Santos and AGL and NSW Farmers, Cotton Australia and the NSW Irrigators Council to refrain from drilling activities without the voluntary consent of landholders.

According to Pearson the deal leaves “the development of Australia’s natural resources hostage to the noisy few at the expense of the collective interest of the many,” while also setting a precedent which could be harmful to the mining sectors of other parts of the country.