Anglo American’s Drayton South mine has been rejected by the Planning and Assessment Commission in order to protect the nearby Coolmore and Darley thoroughbred studs.
The project would have extended the life of the coal mine for 20 years and produced a total of 97 million tonnes of coal.
Anglo has previously said 500 jobs hinge on the extension being approved.
The company first lodged an application for the open cut coal mine extension in 2011 but local residents attempted to block the development claiming it will hurt surrounding tourist, thoroughbred, and wine industries.
PAC agrees and has issued five reasons why the project had been refused.
Chief among them is the need to protect Coolmore and Darley horse studs – which both threatened to leave the area if the mine went ahead.
“The project has not demonstrated that it will not adversely impact on equine health and the operations of the Coolmore and Darley horse studs,” PAC said.
“The economic benefits of the project do not outweigh the risk of losing Coolmore and Darley and the potential demise of the equine industry in the area with flow‐on impacts on the viticultural tourism industries.”
PAC also said the project was not in the public interest.
Darley Australia managing director Henry Plumptre welcomed the PAC recommendation, The Daily Telegraph reported.
"I think it's overwhelming relief, first and foremost, because it was never a battle about winning and losing it was about preserving an industry," he said.
"We campaigned very much on the basis that we, along with other pillars of agriculture in the Hunter Valley, we're going to be the victims of any further mining approvals in the Hunter Valley because we wouldn't be here in 20 to 25 years time."
Coolmore Australia boss Tom Magnier said the decision was a “massive relief”.
“It has been a long, hard struggle for us and also we recognise it has been a very stressful and personally difficult time for Anglo American’s employees at Drayton,’’ he said.
Drayton mine’s general manager Clarence Robertson said extending the life of the mine for as long as possible meant a reduction in the number of crews on site and the decommissioning of equipment which would lead to job cuts.
But with 500 job losses now on the horizon, some say the local Muswellbrook community is set to suffer.
The existing operation provides work for 140 local businesses which receive $70 million worth of local procurement each year.
Editor of Hunter-based magazine Coalface and a member of the Singelton Chamber of Commerce, Shane Davey said the decision was a blow for a town already struggling from the downturn in coal mining, Newcastle Herald reported.
"I’m scared for local business and I’m scared for the community which is already in a state of crisis and this is just going to be a further death knell for further economic confidence that will put us back years."
The NSW Minerals Council said the NSW planning system has put the “helicopter views of millionaire racing identities over the jobs of working people in the Hunter”.
A previous PAC also ruled against the proposed mine.
The CEO of Anglo’s coal business Seamus French said the decision was a “shattering blow” to the local community.
“This has gutted our 500 strong workforce and their families. The PAC’s decision will have serious detrimental implications for the Hunter Valley and for NSW,” French said.
“It is devastating for our employees, it is devastating for our suppliers, it is devastating for the local community and it is devastating for the people of NSW who would have benefited from the annual $35 million in State Government Royalties from the project.”
French said Anglo would provide support to its employees and work through what the refusal means to for them.
He also said the company would work through PAC’s report to understand its implications and consider available options moving forward.