The regional government of Andalusia was seeking 89 million euros ($98 million) over the toxic spill, which contaminated a vast stretch of rivers and wetlands with heavy metals, including arsenic and mercury.
On April 25, 1998, a wastewater` reserve pool burst at Boliden's Los Frailes lead and zinc mine near the city of Aznalcollar, spewing more than five million cubic metres (17.5 million cubic feet) of highly acid sludge into the river and groundwater.
It killed several tonnes of fish and polluted nearly 5,000 hectares (over 12,000 acres) of fragile wetland.
The Andalusian government argued the 89 million euros was equivalent to the sum it spent to clean up.
But a Seville court ruled that under Spain's mining laws in place at the time, Boliden was under "no obligation" to rehabilitate the site.
Boliden has always denied responsibility and blamed a subsidiary of Spanish construction company Dragados that built the wastewater pool several years before it operated the mine.
"The decision of the court confirms our view that the extensive clean-up efforts that Boliden carried out and the compensation at the time of the accident were satisfactory," Boliden chief executive Mikael Staffas said.
But the Andalusian government called the ruling "bad news" and said it would appeal all the way to the Supreme Court, if necessary.
"Whoever pollutes, pays," the regional government's environment minister, Ramon Fernandez-Pacheco, said.
- Legal maze -
The spill contaminated the Guadiamar river: the main fresh water source for the Donana National Park -- one of Europe's best known conservation areas and a UNESCO World Heritage Site.
The park's diverse ecosystem of lagoons, marshes, forests and dunes is on the migratory route of millions of birds and home to many rare species such as the Iberian lynx.
Engineers scrambled to build makeshift dikes at the outskirts of Donana to prevent the toxic water from entering the reserve.
The Andalusia government launched a civil suit against Boliden in 2002 after the dismissal of criminal cases brought by Andalusia, the Spanish state and environmental federations, including Ecologists in Action.
The procedure was bogged down for years as Boliden launched repeated appeals, but in 2012 the Supreme Court ruled that the case against the company should go ahead.
Boliden was fined more than 45 million euros by the government in Madrid in August 2002 but it refused to pay arguing it had not been found guilty in court.
The Aznalcollar mine was closed in 2001 but Mexican mining conglomerate Grupo Mexico has recently applied to reopen it.
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