Federal Environment Minister Tanya Plibersek has blocked the proposed tailings dam site for the McPhillamys gold mine in central western New South Wales, citing its location on sacred Aboriginal land.

The decision to veto the tailings dam was made on cultural heritage grounds, aimed at protecting Indigenous heritage linked to the Wiradyuri Traditional Owners.

NSW Premier Chris Minns expressed disappointment over Plibersek's last-minute decision, criticizing it as a setback for the $1 billion project that had already passed through various approvals.

Regis Resources, the company behind the McPhillamys project, claims the decision jeopardizes the future of the mine, potentially resulting in hundreds of job losses and a significant loss of royalties for the state.

Despite the setback, Regis Resources' share price rose by 9%, indicating some level of investor confidence in the company's future.

Plibersek defended her decision, clarifying that she did not block the mine itself but specifically the location of the tailings dam, emphasizing the importance of environmental and cultural heritage concerns.

This decision follows a four-year assessment process, during which Regis warned that the project would become unfeasible if such a declaration were made.

Regis Resources maintains that developing new plans for relocating the tailings dam could take five to ten years, requiring a restart of the approval process.

The McPhillamys mine, which received development consent from the NSW Independent Planning Commission in March 2023, is expected to produce up to 2 million ounces of gold over 11 years.

The Wiradyuri group's cultural standing has been recognized in previous environmental decisions, highlighting the influence of Indigenous heritage considerations.

Opposition Leader Peter Dutton criticized the decision as politically motivated, suggesting it could negatively impact local communities and livelihoods.

Minns emphasized the importance of mining gold and critical minerals for NSW's economy, particularly as coal mining faces challenges in export markets.