The company is understood to have sunk many millions of dollars into T4, a project that secured its original lease in 2009. The first stage envisaged a 25 million tonne per year terminal, with plans to expand that in the future to 70 million tonnes.

Fairfax Media has approached Don Harwin, NSW Energy Minister, for comment.

'Unfair burden'

James Whelan, a researcher with Environmental Justice Australia, said the community had mounted "a sustained and determined community campaign" over six years to block T4's approval and construction.

"Not a single community group in Newcastle welcomed the proposal to construct a fourth coal terminal, and [Port Waratah Coal Services] had no social licence for its construction or operation,” Dr Whelan said.

"But even without T4, we remain the world’s largest coal terminal and experience an unfair burden - air and water pollution, uncovered coal trains and stockpiles, a devastated natural environment and an economy that relies too heavily on the declining coal industry," he said.

Jeremy Buckingham, Greens energy spokesman, said T4 becoming terminal was "wonderful news".

"Reality is catching up with the great lie that we can continue to export coal in an age of climate change," Mr Buckingham said.

The Greens called on the government "to develop a transition strategy away from coal" and the party would be making this a key election issue, he said.

John Mackenzie, a Newcastle City Councillor, also welcomed the T4 decision.

“From the outset the economics was against this, the science was against this and the community was against it but because of our broken planning system it was approved anyway," Mr Mackenzie said.

“Communities are sick of being placed in limbo by a planning system which has no red lights and a Government who won’t show leadership by refusing new fossil fuel projects at the outset.”

'Key component'

Mr du Plooy said coal would remain "a big part of Newcastle's future".

“Coal is a key component of the global energy mix and is forecast to remain so for the foreseeable future, particularly in our core markets in south-east Asia,” he said.

Stephen Galilee, chief executive of the NSW Minerals Council, said Newcastle's pre-eminent role in coal exports would continue with or without T4.

“Coal exports through the Port of Newcastle are at or near record levels, and the existing terminal infrastructure is capable of handling up to 30 per cent of additional capacity if needed due to increased demand for NSW coal," Mr Galilee said.

A spokeswoman for the Port of Newcastle said the decision not to proceed with T4 was "disappointing but not unexpected".

"While the Port of Newcastle will continue to be the world’s largest coal port for decades to come, today’s announcement that T4 will not be going ahead is further evidence of the need for the Port of Newcastle, and indeed the Hunter Valley economy to diversify as rapidly as possible, which is why we are so committed to the pursuit of a container terminal," the spokeswoman said.