Mining billionaire Clive Palmer has been dealt a blow in court, losing a bid to have his central Queensland rail corridor project re-assessed.

Clive Palmer’s legal bid to have his Queensland rail corridor proposal re-assessed has been dismissed.

Last October the Newman government rejected an application by Mr Palmer’s company Waratah Coal to approve a rail corridor linking mines in central Queensland’s Galilee Basin with the Abbot Point coal port as a significant project.

A major reason given for the rejection was that it lay outside two rail corridors identified by the government.

Months earlier the government had approved a partnership of Indian mining giant GVK and billionaire Gina Rinehart’s Hancock Coal to build the first Galilee-Abbot Point rail link.

Waratah applied to the Supreme Court of Queensland for a review of the decision and a two-day trial was held in June.

Waratah argued the decision by Development Minister Jeff Seeney and his department’s co-ordinator general to reject its bid was unreasonable, failed to assess the proposal on its merits, and ignored a shift in government policy and shortcomings in the GVK-Hancock proposal.

Justice Martin Daubney on Wednesday rejected the arguments and dismissed the application, ordering Waratah Coal pay Mr Seeney and the co-ordinator-general’s legal costs.

In his written reasons the judge noted Waratah had insisted on putting forward its application even though its proposed rail line didn’t lie within the government’s preferred corridor.

“Waratah knew that its application was for a facility which was not in accordance with government policy, but nevertheless insisted that the assessment be completed,” he wrote.

In March the Supreme Court also rejected Waratah’s bid to have a stand-alone coal terminal at Abbot Point declared a significant project.

Mr Palmer is suing Premier Campbell Newman and Mr Seeney for defamation over claims he sought special favours for Waratah Coal’s interests, including exclusive access to the rail line and associated port facilities.

Waratah Coal said it planned to review the latest decision.