Australia’s highest court has ruled against the expansion of a major coal mine, finding that planning authorities had failed to ensure that emissions of planet-warming greenhouse gases would be “minimised to the greatest extent practicable”.

Environmental campaigners called Wednesday’s court decision the first climate case to reach the country’s highest court. They said it set a “binding national precedent” requiring climate damage be weighed when fossil fuel projects are considered.

In the ruling, three of the High Court’s five judges found that the expansion of the Mount Pleasant mine in New South Wales must be halted. Planning authorities, they said, were obliged to consider granting consent only with conditions ensuring that all greenhouse gas emissions were minimised, and had not done so in this case.

The case was brought by retired science teachers Wendy Wales and Tony Lonergan, who had fought for years to halt the planned mine expansion in Australia’s rural coal-digging heartland.

“Today the High Court has said what we have always known,” Wales said in a statement. “We cannot dig up coal, ship it overseas, watch it drive climate change, and then pretend the consequences have nothing to do with us and won’t be felt by us.”

The mine’s operator, Mach Energy, had sought to extend the life of the open-cut mine in the Hunter Valley by more than 20 years, to 2048, and to nearly double its annual output. Mach is owned by Droxford International, a subsidiary of Indonesia’s Salim Group.

Mach argued that coal exported and burned overseas could not be clearly linked to environmental effects felt near the mine.

The company’s proposal was initially approved by the New South Wales Independent Planning Commission. But environmental campaigners disagreed, saying every ounce of greenhouse gas released into the atmosphere made bushfires, floods and drought more likely.

“Today, the highest court in the country agreed that those decisions have to account for the damage they cause,” said Lonergan. “This isn’t the end of coal overnight. But it is the end of coal mine approvals that look the other way on climate.”

Australia is one of the world’s largest fossil fuel exporters, ranking among the top sellers of both coal and liquefied natural gas.

Anita O’Hart, a lawyer for Wales and Lonergan’s community group, said the “historic” ruling was expected to affect how future fossil fuel projects are handled.

“The High Court has confirmed that planning authorities cannot ignore the chain of causation from a project’s emissions through to real, local climate harm,” she said.

“This ruling will be applied by courts and planning authorities across Australia, and it will be studied internationally as one of the most significant domestic climate law decisions in the world.”

Mach Energy said it was “disappointed with the outcome” but accepted the court’s decision.

“We will continue to actively pursue all available options to ensure the long-term continuity of the Mount Pleasant operation,” the company said in a statement.