Daracon is reviewing the Independent Planning Commission's refusal of its expansion of the Martins Creek Quarry, as well as future operations at the site.
The planning commission on Monday rejected a bid by Daracon Quarries subsidiary Buttai Grave to expand the quarry to extract 1.1 million tonnes of material every year for up to 25 years.
In its Statement of Reasons for refusal, the commission found that "the road transportation of 450,000 tonnes a year of hard rock quarry product over 25 years would have unreasonable and unacceptable impacts for the communities along the proposed haulage route".
It acknowledged that the project had "strategic value and economic benefits" and that the on-site issues associated with the proposal could have been appropriately managed.
A Daracon spokeswoman said the company was reviewing both the basis for the IPC decision as well as future operations at the site.
"We're elated and still digesting it all," he said.
"We had numerous concerns but the IPC focused in on the traffic aspect, which was our major issue as well. The impact on amenity and safety issues of trucks going through a small village would have been devastating.
"What the IPC referred to mirrored a lot of our issues but not all of them."
Upper Hunter MP Dave Layzell welcomed the commission's decision.
"Common sense has finally prevailed and the community concerns about the impact of this project have been heard," he said.
Mr Layzell previously used a Private Members Statement to voice opposition to the company's plans to run trucks through the rural village of Paterson and the impact it would have on Dungog shire roads.
"The IPC decision is a hard-fought victory for residents of Paterson and will also address the concerns of Bolwarra Heights, Bolwarra, Largs and Lorn residents with the potential for additional road haulage through these residential areas removed," he said.
Daracon has been urged to return to the negotiating table and draw-up plans for the rail haulage of product from the quarry.
Upper Hunter Labor Candidate Peree Watson also commended the decision.
The voices of the communities of Paterson, Martin's creek, Dungog, Tocal, Bolwarra and Bolwarra heights were heard loud and clear," she said.
"This has been a stressful process for all these communities and I am so thankful to each and every resident who made submissions, spoke at forums and made sure that impacts of the proposal on their everyday lives were taken into consideration. This is Community advocacy at its best."
