Conservationists fighting a decision to allow an Australian mining company to dig for coal on the West Coast's Denniston Plateau have suffered a major setback today with a High Court appeal being thrown out.

The Royal Forest & Bird Protection Society was appealing against interim resource consent given to Bathurst Resources Limited for an 188ha open-cast mine on the plateau near Westport.

It had argued that the Environment Court did not give proper consideration to the possibility of there being two open-cast coal mines simultaneously working the area when it gave Bathurst the go-ahead.

The environmental watchdog said the effects of an unimplemented coal mining licence by state-owned Solid Energy for another mine, the Sullivan Mine, also on the Denniston Plateau, should have been taken into account, even though it's not been used and expires in 2027.

The cumulative effect of both mines operating at the same time were not properly considered, it claimed.

Buller Coal Limited, owned by Bathurst Resources Ltd, rejected the environmentalists' "narrow" argument, as did West Coast Regional Council and Buller District Council, which granted mine consents to Buller Coal last year.

In a 21-page judgement released today, High Court judge Justice John concluded there was "no material error of law in this decision not to embark upon cumulative effect analysis."

The appeal was dismissed, and costs were reserved.

The judge is expected to announce a decision on further points relating to the plateau's biodiversity appealed in the High Court tomorrow, and a further hearing of the Environment Court appeal is scheduled for June 12.

Forest & Bird said it was disappointed with the High Court's decision but vowed to fight on.

"No one's denying that mining Denniston will cause irreversible damage to the plateau's unique landscapes and vital habitats," said spokeswoman Debs Martin.

"And the judge said in his decision we had put forward a very powerful proposition ... that if cumulative effects are not considered now, they never will be.

"So while we may have lost on this one point, we still have a very strong case in the Environment Court to save the plateau."

Bathurst Resources general manager corporate relations Sam Aarons, however, said Bathurst was delighted with the decision.

She said it put the company another step closer to developing the Escarpment project, which was of such importance to the West Coast communities and to New Zealand.

Buller Mayor Pat McManus said the Sullivan appeal decision was another obstacle overcome.

"It's another one of those small hurdles that we have jumped again today... it's great news for Bathurst and great news for Westport."

However, Mr McManus said he was still anxious about the potential for more legal wrangling.

He was hopeful that as news of today's decision started to filter through to people in the area, "locals would start to spend locally again".

Conservation Minister Nick Smith last month approved access rights to the Australian firm for the project, saying it would provide a $1 billion boost to the economy and create 225 jobs.

- APNZ