Chatham Rock Phosphate has been refused consent to mine on the Chatham Rise because it would "cause significant and permanent adverse effects" with only modest economic benefits.

The refusal was "a seriously negative signal" for business, CRP managing director Chris Castle said.

"To say we are bitterly disappointed is an understatement. We are aghast," Castle said.

"The entire government process, and the EPA in particular, seems afraid to say yes to any project that involves any kind of environmental impact and that is simply not good enough if we are to provide a future for our country's young people."

The decision would make it even harder, "if not impossible for companies to attract capital for new projects in New Zealand".

As the second application of its kind there had been some improvements in the process he said.

"If we can't succeed having invested $33 million over seven years, then obviously the government is not serious about economic development."

"We had a strong level of agreement by scientific and other experts from both sides that the environmental effects were either limited or manageable."

"Obviously we need to take a bit of time to digest what the decision means and what our next steps will be, the options being an appeal, resubmitting, or walking away," Castle said.

This morning, the Environmental Protection Authority refused an application by Chatham Rock Phosphate for a marine consent to mine phosphorite nodules on the Chatham Rise.

The decision, which was made by a Decision-making Committee (DMC) appointed by the EPA Board.

CRP has 15-working days to lodge any appeals to the High Court, but that can only be on points of law.

The committee said the economic benefits of the plan would be "modest at best".

EPA General Manager Applications & Assessment Sarah Gardner said the committee concluded that mining would cause "significant and permanent adverse effects" on the existing benthic environment on the Chatham Rise, the environment close to the seabed.

This included communities dominated by protected stony corals which were potentially unique to the Chatham Rise and which the DMC concluded were "rare and vulnerable ecosystems".

Gardner said that despite the applicant's efforts to research and substantiate its case, the DMC was left with a lack of certainty about the receiving environment and the adverse effects of the proposal on the environment and existing interests.

"In these circumstances the DMC was required by the legislation to favour caution and environmental protection when making its decision," she said.

The committee considered whether the adaptive management approach proposed by the company would allow for the proposed mining operation to go ahead.

"However, the DMC found that the destructive effects of the extraction process, coupled with the potentially significant impact of the deposition of sediment on areas adjacent to the mining blocks and on the wider marine ecosystem, could not be mitigated by any set of conditions or adaptive management regime that might be reasonably imposed."

Gardner said the DMC had also concluded that the economic benefit to New Zealand of the proposal would be modest at best.

"After weighing all the material before it, taking into account the matters listed in the relevant legislation and applying the information principles, the DMC has concluded that the application could not be approved either in part or in whole and therefore the application was refused."

GREENS APPLAUD DECISION

Greens MP Gareth Hughes is celebrating the "fantastic" decision, after years of campaigning against the seabed mining project.

The EPA listened to advice from scientists, community groups and the fishing industry who opposed the "destructive activity." The move would protect oceans, deep sea coral and unique marine life, he added. "It's also a victory for those groups who stood up to protect the unique Chatham Rise and our environment."