Located at Camberwell village, the 315 hectare-Ashton mine is 60%-owned by Yancoal Australia, 10% by Japan’s Itochu, while the remaining 30% is held by other organizations.
Justice Nicola Pain said: "On balance I consider that approval can be granted but that approval must be subject to adequate conditions about which a number of issues of clarification and possible alteration remain."
However, the court ruled that Yancoal should comply with various factors associated with air quality, water resources and acquisition of properties.
Yancoal investor relations manager James Rickards said: "We are taking the appropriate time to review today’s determination and will continue to work with the court in the interests of achieving a final resolution."
The Planning Assessment Commission initially rejected Yancoal’s plan to dig a new open pit at the mine; however, it was overruled by the court in September 2013.
The community and environmental groups were concerned over coal dust pollution and depletion of local water sources due to coal mining.
