A bid to develop a goldmine beneath an Adelaide Hills winery has been rejected by the South Australian government.

Mining company Terramin has been working for seven years to reopen the mine, which it estimates could unlock half a billion dollars worth of gold.

The goldmine, which closed in 1935, is located next door to the Bird in Hand winery in Woodside.

Despite a department examination finding Terramin’s proposal would have met all statutory obligations, Energy and Mining Minister Tom Koutsantonis said threats to the tourist region were too great to give the mine final approval.

“The area of the proposed mine is home to a world-class viticulture industry, producing some of Australia’s best-loved wines,” he said.

“Tourism to the region is a critical contributor to the local economy and, on balance, there remains a possibility this proposed short-term mine may adversely affect the established and significant long-term agricultural and tourism industries of the Woodside area immediately adjacent the project areas.”

In a statement, Terramin said it was both surprised and disappointed by the government’s decision. 

“Terramin understood that it had provided comprehensive responses to the satisfaction of [the department] and addressed all regulatory requirements,” it said.

“To have been through this exhaustive process and then be denied the mining lease with no clear explanation of the grounds for this decision is most unexpected.”

The company said the mine would have created more than 140 highly paid mining jobs “and many more indirect jobs”.

In 2020, Terramin lost a bid to block a proposed expansion at the Bird in Hand winery.

At the time the company claimed the expansion, which included a four-storey function centre with an underground barrel room, would have a “huge” impact on the landscape 

Meanwhile, Bird in Hand opposed Terramin’s plans because they and other local viticulturalists said it could possibly contaminate local groundwater.

Terramin also had to formally apologise to the winery after its lawyers were accused of engaging in bullying and intimidation against Bird in Hand.

MPs thankful application blocked

The move to block the mine has been praised by Adelaide Hills independent MPs Rebekha Sharkie and Dan Cregan.

“I have always said you can farm the land for generations but you can only mine it once,” Ms Sharkie said.

“This decision ensures this rich arable land will be available for many generations to come, in what is essentially an award-winning wine region.”

Mr Cregan thanked the minister “for his wisdom”, saying the proposed mine had caused “deep alarm” in his community.

“My constituents were also deeply concerned about truck movements, underground blasting, dust and the impact on the local environment and amenity,” Mr Cregan said.