Resource industry groups in Queensland and Western Australia warned on Thursday that the High Court's ruling against the Mount Pleasant coal mine expansion could unsettle investors, while federal ministers and both state premiers said the decision turned on New South Wales law and reached no further.

The court ruled 3-2 on Wednesday that the NSW Independent Planning Commission's 2022 approval to extend the Hunter Valley mine near Muswellbrook was invalid, dismissing an appeal by its owner, MACH Energy. The expansion would have kept the open-cut mine running until 2048, added 406 million tonnes of coal and doubled output from 10.5 to 21 million tonnes a year.

Justices Gordon, Edelman and Beech-Jones held that the Commission was required by a NSW planning instrument, the Resources and Energy SEPP, to consider imposing conditions to minimise all the greenhouse gas emissions identified in the project's environmental impact statement. It did not do so for scope 3 emissions, those released when the coal is burned, mostly overseas. Those made up 860 million of the project's 876 million tonnes. Chief Justice Stephen Gageler and Justice Jagot dissented.

The ground is narrower than some early coverage suggested. The majority did not adopt the NSW Court of Appeal's reasoning about local climate impacts and left open whether climate change counts as a local environmental effect. The case now returns to the Land and Environment Court, which can suspend the consent or set terms that would validate it.

The existing mine keeps operating. A separate approval granted in August lets it run until the end of 2032. "The court's decision relates to the way the mine's expansion was assessed and approved in 2022, under the former government," the NSW government said. "It does not mean the expansion cannot be reconsidered or that coal mine extensions cannot be approved."

That has not settled the industry. "We are very concerned that our international partners, whether they're investors or customers, will look at what's been happening in Australia," Queensland Resources Council chief executive Janette Hewson told the ABC. In Perth, Chamber of Minerals and Energy WA chief executive Aaron Morey said blocking such projects would push development "in other countries with lower environmental controls and standards". Minerals Council of Australia chief executive Tania Constable said on Wednesday that mines "may have to work out how to reduce emissions from their export customers".

Federal Industry Minister Tim Ayres said the ruling was "absolutely confined to the provisions of the New South Wales Act". Queensland Premier David Crisafulli said his state had "the best laws in the country" and was "the most pro-mining government in the nation". The ABC reported that Queensland's environmental law already requires regulators to consider scope 3 emissions.

Asked about Woodside's $30 billion Browse gas proposal, WA Premier Roger Cook said it was still going through state and federal environmental assessment. "Ultimately this was a decision the High Court made about a state jurisdiction in New South Wales and so we need to understand if there are any implications for WA and what they may be," he said.

The case was brought by the Denman Aberdeen Muswellbrook Scone Healthy Environment Group, a local residents' association, and not one of the national environmental organisations. Its president, Wendy Wales, described a town "now encircled by mines". Liz Hicks, a University of Melbourne lecturer who worked on a submission to the court, said the decision "turns on NSW law, so its direct effect on other states is limited, but courts and decision-makers across the country will take note".

MACH Energy said it accepted the decision and would "continue to actively pursue all available options" for the mine's future. The next step is in the Land and Environment Court, which will decide what happens to the 2022 consent. Browse remains under assessment in Western Australia.