A New Zealand offshore mining company has lost its supreme court bid to overturn a decision preventing it from mining millions of tonnes of iron-sand off the coast of South Taranaki, on New Zealand’s North Island.

Thursday’s unanimous ruling by New Zealand’s supreme court, which upheld previous high court and appeal court decisions revoking Trans-Tasman Resources’ (TTR) permission to mine, was welcomed by environmentalists and the mining company, albeit from opposing perspectives.

Environmental groups described the ruling as a victory and the “final nail in the coffin” of the proposal, However, the mining company said it was now confident of getting consent successfully “re-approved”.

The judgment is the latest in a long-running legal battle by environmental and community groups against TTR’s plans to dredge 50m tonnes of iron-sand – a type of sand with heavy concentrations of the metal – from the seabed of the South Taranaki Bight, on the west coast of the North Island.

Debbie Ngarewa-Packer, who led the Ngati Ruanui iwi (people) of South Taranaki through successive legal challenges to TTR’s plans, said the ruling was the “final nail in the coffin” of the plan.

“We couldn’t have asked for a better decision,” Ngarewa-Packer, now co-leader of the Te Pati Maori party, told New Zealand’s Stuff news website.

“This was always about a small grassroots group who didn’t want our beach polluted,” she said. “We wanted to continue to surf and eat, and this activity threatened that.”

The supreme court ruled that the Environmental Protection Agency erred in law when it granted TTR consent in 2017 and rejected the company’s appeal. It further ruled that the decision would be sent back to the EPA’s decision-making committee for reconsideration.

Ngarewa-Packer described such a review as a “technicality”, adding: “The courts have determined this type of activity doesn’t sit within the legislation.”

James Hita, of Greenpeace Aotearoa’s seabed mining campaign, said: “This ruling is a victory for the ocean, and for people power. For the better part of a decade, iwi, Greenpeace, Kasm [Kiwis against Seabed Mining] and coastal communities have worked together to oppose the proposal to mine in the South Taranaki Bight. And today we won.”

TTR welcomed the chance to have the consent reconsidered. In a statement, its executive chair, Alan Eggers, said: “TTR is satisfied with the decision.

“The legal issues are now very narrowly defined and there are no aspects of the judgment that are an impediment to TTR having the consents re-approved. The court’s rulings provide a pathway to a successful resumption of proceedings with the EPA.”

The EPA granted TTR consent to mine an area of 66 sq km (16,000 acres) on the seabed off South Taranaki in 2017. Ngati Ruanui and 10 environmentalist and fishing groups successfully fought the approval, first through the high court and then the appeal court. TTR then turned to the supreme court.

In its 130-page judgment, the supreme court dealt with a number of issues concerning the proper interpretation and application of the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act.

All five justices of the court agreed that the EPA had erred in law when it granted the mining consent in 2017.

TTR claimed the court of appeal had relied too strictly on environmental protection and that assessment of the proposal must also consider economic benefits.

The supreme court disagreed and said that, given the uncertainty of information on how TTR’s activities would affect species including marine mammals and seabirds, the EPA’s decision-making committee “simply could not be satisfied that the conditions it imposed were adequate to protect the environment from pollution”.

More than 35 species of marine mammals have been documented within the South Taranaki Bight region, including at least eight species or subspecies classified as threatened or vulnerable by the International Union for Conservation of Nature, including a genetically distinct and isolated population of New Zealand pygmy blue whales that live there all year.