The fast-track approvals panel has declined plans to mine the Taranaki seabed in a draft decision.
Trans-Tasman Resources (TTR) wanted to mine 50 million tonnes of seabed a year for 30 years in the South Taranaki Bight.
In May, the company's executive chair, Alan Eggers, said it had identified a world-class vanadium resource that could contribute $1 billion annually to the economy.
That was reported at the same time the project's application to be considered by the Fast Track Panel was approved.
In a draft decision released on Thursday evening, the panel found there would be a credible risk of harm to Māui dolphins, kororā/little penguin and fairy prion.
The panel also found there was uncertainty as to the scale and extent of the sediment plume and underwater noise generated from the project.
It said the adverse impacts of the plan were sufficiently significant to be out of proportion to its regional and national benefits.
TTR executive chairman Alan Eggers said he found it difficult to accept the panel intended to decline the project's environmental approvals with concerns on almost every aspect.
"All the concerns raised by the expert panel were fully addressed in our application, which was supported by leading expert evidence and comprehensive responses to issues raised during the hearings process."
Eggers said it was hard to reconcile why the panel did not accept the evidence the company provided.
TTR now had until 19 February to comment on the decision.
The company would consider its options on what next steps it might take in advance of the application decision being finalised, Eggers said.
In a statement, the minister leading the Fast Track regime, Chris Bishop, said the decision currently remained in draft form, with the final decision due on 18 March.
"This is an independent process run by the expert panel, and there is still more of that process to go, including a period for interested parties to provide comment. As such it would be inappropriate to comment further".
In May, the head of Kiwis Against Seabed Mining Cindy Baxter said she was "livid" at the approval of the project to the panel.
She said there was "massive opposition" to the project and seabed mining in general.
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