A company backed by mining magnate Gina Rinehart has lost a major court case against the Victorian government over the state's ban on onshore gas exploration.
Lakes Oil launched legal action in 2016 seeking more than $2.6 billion in lost earnings and damages after the Andrews government put a ban on fracking and exploration of unconventional onshore gas.
But the company, part-owned by Ms Rinehart, lost the case on Friday afternoon when the Supreme Court rejected its claims that the state-wide moratorium was unlawful or ineffective.
The decision relieved environmental group Friends of the Earth organiser Zianna Fuad, who said the ban was introduced to protect the land, water and climate from invasive drilling.
"Victorian communities fought tirelessly for more than five years to secure Australia's first permanent ban on fracking," Ms Fuad said in a statement.
She praised the state's Resources Minister Tim Pallas for remaining strong on the ban and hoped other states would take note of the court's decision.
"Overall it sends a strong signal to other states who are currently fighting the fracking industry, proving that the bullying tactics used by mining companies are weakened when communities are united," Ms Faud said.
Lakes Oil had sought damages of $92 million it had already spent as well as some $2.6 billion in lost future earnings as the ban prevented it from using six approved permits to explore in Gippsland and southwest Victoria.
On Friday, Justice Cameron Macaulay ruled the ban prohibited all onshore exploration work in the moratorium period.
Australian Associated Press