PLANNING Minister Matthew Guy has rejected Stawell Gold Mines' proposal to mine open-cut pits at Stawell's Big Hill.
The decision came on Thursday after an independent panel recommended the proposal should not be approved.
Friends of Big Hill spokeswoman and Stawell resident Sherrie Hunt said she was relieved but refused to claim a victory.
"There are no winners in this because people will lose their jobs," she said.
"But we're happy with what Minister Guy said, which is that the potential effects on air quality, amenity and social well-being were too great to ignore."
She said if the proposal was approved it would have set a dangerous precedent.
"This isn't just about Stawell or Victoria this is about Australia," she said.
Mrs Hunt lobbied against the proposed mine, which she believed would have forced her and her husband to move .
"I'm relieved, but our personal feelings never came first it was always about the health of the town," she said.
Mr Guy's decision infuriated Northern Grampians Shire Council, with Mayor Kevin Erwin labelling the process appalling.
"Neither council nor Stawell Gold Mines had any idea this decision had been made. We have been completely blind-sided," he said.
"The decision has been made and we must abide by it, but to say we are disappointed by the way it has been announced by the State Government is an understatement."
Cr Erwin said a huge question mark now hung over the proposed physics laboratory that had garnered international interest.
"The impacts of this decision are severe and we need to know what is going to happen next so we can prepare ourselves as a town," he said.
Mine objector Helga Saunders said Mr Guy made the right decision.
“Health regulations could not be met and it would have had enormous health costs to Stawell,” she said.
“Stawell has already got so many health problems, to have the mine on top would have been most unethical.”
Mr Guy said he knocked back the proposal because of potential for significant environmental impacts on air quality and public health.
“The predicted economic benefits of the project do not outweigh the adverse impacts on air quality and the project does not provide the necessary community benefit to the state in regard to both short and long-term economic, environmental and social consequences,” he said.
It is the second time in 14 years a proposal to mine Big Hill has been rebuffed.
“A similar proposal for Big Hill was considered in 2000 and was also unsuccessful due to environmental effects,” Mr Guy said.
Labor candidate for Ripon Daniel McGlone said the decision was a slap in the face to Stawell.
“I’m obviously very disappointed and what I find inexplicable is that the minister would shut the door on the mine without giving an opportunity of redress,” he said.
“It’s short-sighted as to the viability of Stawell – it’s damaging.”
Greens candidate Rod May is the only election hopeful who has had a consistent and definitive position on the proposal.
“The risks associated with health and environment have been clearly acknowledged,” he said.
“It will have some short-term impact on Stawell’s employment but we believe there are other opportunities for Stawell, particularly in the renewable energy area, that could well take up a lot of that slack in the future.”
Liberal candidate Louise Staley said it was important to respect the panel’s decision.
“These things are always a balancing act,” she said.
“Stawell has a bright future that is not in one mine.”
A Stawell Gold Mines spokeswoman said the company was extremely disappointed and was considering its position.