The Department of Planning has said mining at Centennial Coal’s Springvale mine should be allowed to continue for a further 13 years.
The Department said it recommended the mine’s expansion be approved with a number of strict conditions to manage potential impacts, including limits on the salinity of mine-water discharges, and requirements on offsetting subsidence impacts to upland swamps.
The Planning Assessment Commission (PAC) is now tasked with assessing the project for final approval.
Centennial said while it welcomed the Department’s recommendation, it had not come in time to save jobs.
"It has not been in time to prevent the majority of the Springvale workforce, in excess of 300 employees, being stood down," a spokeswoman said.
"We have had no other option than to stand down the majority of the Springvale workforce by August 21, and until such time as the appropriate approvals have been secured [they won't return to work]."
The move has sent shockwaves through the Lithgow community. Almost 400 people attended a community meeting on Friday where Lithgow Mayor Maree Statham said she was hopeful the mine would secure the permits it required to continue mining.
"Unfortunately it is an industry where, out of the blue, this has happened," Statham said.
"It's not something that was predicted or even thought would happen.
"I hope that these families can find a way clear, just to get by for the next few weeks, hopefully a very short period of time."
Springvale Mine is the only local coal source for the Mt Piper Power Station, which provides 15 per cent of the State’s electricity.
The expansion would secure 310 full-time jobs and an additional 60 jobs during construction as well as 1,200 indirect jobs across NSW. A PAC decision is expected in the coming weeks.
Greens mining spokesperson Jeremy Buckingham said the extension should not be approved given the high number of environmental breaches by Cenntenial, including for a massive spill of waste coal from its Clarence Colliery into the Wollangambe River last month.
"Centennial coal has an abysmal environmental record and the Springvale mine has had over 900 breaches of its environmental licence since 2000," Mr Buckingham said. "An extension should not be granted, particularly given this company is a rogue operator that continually flouts the law."