SHCAG challenged NSW Resources and Energy Minister Anthony Roberts' decision to approve Hume Coal's application to drill 25 exploratory boreholes in Sutton Forest.

The decision was challenged in the Land and Environment Court and was dismissed on Tuesday afternoon.

In her judgement, Justice N Pain said there was no likelihood the exploration would significantly impact the environment.

Court documents said the judgement ruled that there was no threat of serious or irreversible damage to the environment from the exploration project.

SHCAG convenor Peter Martin has since told the Southern Highland News that this was "very disappointing" but it was "one battle in the war".

"We had a very close look at the document Hume Coal submitted and we felt there was a real lack of information of environmental and social issues," Mr Martin said.

"We are going to sit back and have a look at the judgement and review our options.

"The fight is far from over, it's just a skirmish."

Hume Coal project director Greig Duncan said Hume Coal was "very pleased but not surprised" with the Land and Environment Court ruling.

"Once again the action group has been shown to have no credibility," Mr Duncan said.

"We do the right thing and follow due process to the letter of the law in everything that we do.

"We look forward to getting on with our work and creating a viable industry for the people of the Southern Highlands and NSW."

Hume Coal's preliminary environmental assessment for its mine project plan is available to view online and Hume Coal will host community information sessions across the shire this month.

Details: http://www.humecoal.com.au/