The Caroona Coal Action Group had previously argued the CMA exploration licence was invalid, as the original licence, which was transferred, had expired. Adding to their argument was a belief then-mining minister Ian Macdonald did not follow procedure in granting the licence.

If the Caroona Coal Action Group had been successful, BHP’s licence to explore for coal on the Liverpool Plains would be declared invalid.

Appeal Judge Murray Tobias, on behalf of a three-member panel, upheld last May’s Land and Environment Court ruling that said BHP’s coal-exploration licence was legal.

The court also awarded costs against the CCAG.

CCAG spokesman Timothy Duddy said the group would consider an appeal to the High Court.

“We’re looking at our options,” Mr Duddy said after the ruling was made.

“We’re not engaging in frivolous litigation,” he said.