The ACF had sought to establish a landmark climate change case in Australia, arguing approval of the proposed mega coal mine in Queensland's Galilee Basin was inconsistent with the country's international obligations to protect the Great Barrier Reef.

The case had gained more urgency since being lodged in November last year, with the reef experiencing its worst recorded bleaching event, which scientists say may have killed off a fifth or more of its corals in one hit.

Adani Australia welcomed Monday's decision, stating on Facebook that the verdict "again reinforces the stringency of the strict, science and evidence-based federal environmental approval process governing the company's planned mine at Carmichael".

"At their core, these challenges have been about stopping investment and jobs as part of a wider activist campaign against mining," the Indian-based miner said, adding that a recent report by PwC had put the costs of delay at about $3 billion.

Josh Frydenberg, federal environment and energy minister, also welcomed the Federal Court decision.

"The finding provides greater certainty for the Commonwealth's decision making process for approvals under the Environment Protection and Biodiversity Conservation Act 1999," Mr Frydenberg said in a statement. "The project includes 36 of the strictest environmental conditions in Australian history."

Matthew Canavan, federal minister for resources, said on Twitter that the decision was "good news for jobs".

Fighting on

The ACF, however, vowed to keep fighting to prevent the mine - with a production capacity of as much as 60 million tonnes a year - from going ahead.

"If the Carmichael mine proceeds, its coal will create 4.7 billion tonnes of climate pollution over the proposed life of the mine, wiping out Australia's efforts to reduce pollution and contributing to more frequent and severe bleaching events on the reef," Kelly O'Shanassy, ACF's chief executive, said in a statement.

"It is extraordinary that in 2016 a federal Environment Minister can argue in court that a mega-polluting coal mine will have no impact on the climate and the Great Barrier Reef," she said. "We'll do everything we can to stop this mine."

Before the verdict from Justice Griffiths, ACF chairman Geoff Cousins predicted more challenges against coal mines such as Adani's.

"Win or lose ... these issues will become and more prominent as time goes on," Mr Cousins said.

Mr Cousins said groups such as ACF were pinning their hopes on Mr Frydenberg to take a different stance on climate matters from his predecessor, Greg Hunt.

"Josh Frydenberg has a great opportunity to lead," Mr Cousins said. "He's certainly aware of all these issues."

ACF has said Carmichael would be Australia's largest coal mine, covering more than 45,000 hectares in size and producing as much carbon dioxide annually as New Zealand.

A spokesman for Adani said the company is ready to proceed with the mine "pending the resolution of a small number of outstanding legal challenges".

"[I]f those issues are finalised, construction can commence in 2017," he said.

The parties have seven days to agree on the legal costs of the case, ACF said.

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