The nation’s largest coal mine is free to proceed after Environment Minister Greg Hunt MP approved it with “the strictest conditions in Australian history”, in a decision declared “a disaster” by environment groups.

Mr Hunt on Thursday said the Carmichael coal mine proposed by Indian mining giant Adani has been given the green light “in accordance with national environment law” after the Federal Court set aside the previous approval in August.

Environment Minister Greg Hunt, with Prime Minister Malcolm Turnbull, announced on Thursday the mine would proceed. Photo: Alex Ellinghausen

The project, which will produce up to 60 million tonnes of coal for export a year, has faced staunch opposition because its Abbot Point terminals are located close to the Great Barrier Reef.

Opponents have already flagged an intention to launch a legal challenge to the latest approval.

The government decision clears a regulatory hurdle, yet there are still questions over how the $16 billion project will be financed. National Australia Bank has said it will not fund the mine and other banks are being pressured to follow suit.

Equipment at the Abbot Point coal terminal in Queensland. Photo: Glenn Hunt

The court previously said Mr Hunt had not properly considered advice about two threatened species – the yakka skink and the ornamental snake.

Mr Hunt on Thursday said his approval for the project, in the Galilee Basin in remote central Queensland, considered additional information provided by Adani and environmental groups.

The approval, which includes a rail line, would be “subject to 36 of the strictest conditions in Australian history”.

“The conditions I have imposed take into account issues raised by the community and ensure that the proponent must meet the highest environmental standards,” Mr Hunt said.

Former prime minister Tony Abbott with mining magnate Gautum Adani. Photo: Andrew Meares

These include implementing all advice from an independent expert scientific committee and protecting and improving 31,000 hectares of southern black throated finch habitat.

The approval will require $1 million funding for research programs to improve conservation of threatened species over 10 years and ensuring protection of Doongmabulla Springs through strict monitoring of groundwater and action triggers.

“The rigorous conditions will protect threatened species and provide long-term benefits for the environment through the development of an offset package,” Mr Hunt said, saying he would personally approve the measures before mining can start.

Protesters oppose the Carmichael coal mine in Brisbane. Photo: Glenn Hunt

Mr Hunt will also reserve the power to suspend or revoke the approval and penalties will apply if conditions are breached.

Department of Environment compliance and enforcement officers will monitor the mine’s operation and Adani must provide a groundwater management and monitoring plan.

The Mackay Conservation Group launched its legal challenge in the Federal Court in January, alleging that greenhouse gas emissions from the mine, vulnerable species and Adani’s environmental track record had not been taken into account.

Mr Hunt said the court set aside the mine’s earlier approval at the request of the government “due to the possibility that the advice on the approval decision had not been provided in a particular manner which may have affected the validity of the decision”.

Mackay Conservation Group said Mr Hunt’s decision “risks threatened species, precious ground water, the global climate and taxpayers’ money”.

“[Mr] Hunt  is sacrificing threatened species … and precious ground water resources for the sake of a mine that simply does not stack up economically,” the group’s coordinator Ellen Roberts said, adding the black throated finch would probably be pushed to extinction.

She said the conditions set by Mr Hunt did not adequately deal with the serious implications of the mine, which “can’t be offset”.

Greenpeace Australia Pacific campaigner Shani Tager said the mine would be “a complete disaster for the climate and the Great Barrier Reef”.

“This project means more dredging in the Great Barrier Reef, more ships through its waters and more carbon emissions,” she said.

Adani welcomed the decision, saying the initial legal hurdle was a “technicality … arising from a technical error on the part of the Environment Department”.

In a statement, the company said it was always “confident in the soundness of the broader approvals, that the species involved had been protected by conditions, and that the technical error would be promptly rectified”.

“Today’s announcement … makes clear that these concerns have been addressed, reflected in rigorous and painstaking conditions,” it said.

The decision would help the company deliver mine, rail and port projects in Queensland and deliver 10,000 direct and indirect jobs, and $22 billion in taxes and royalties to be reinvested into community services, Adani said. The jobs figure has been disputed by critics.

Lobby group GetUp! on Thursday said its members had already helped fund legal action against the mine, and the organisation was “exploring the legal opportunities available to us” in light of the latest decision.

“This coal mine is the dumbest, most dangerous and uneconomic development in Australia,” senior campaigner Sam Regester said.

“We are calling on GetUp! members and the community to stand up and fight this mine again. We’ve beaten it before and we can beat it again.”