The Planning Assessment Commission has given Rio Tinto’s Mount Thorley Warkworth extension the green light.
After appealing the decision, the NSW Supreme Court also ruled that Rio was not allowed to go ahead with the expansion in April 2014.
Current planning approvals mean the mine can only sustain existing production and employment levels until the end of 2015.
The company says the new applications will provide it with an integrated operation which can sustain mining within the existing footprint for the next 30 years.
It says the plan means the 1300 employees and contractors who work at the site will have job security.
In its assessment of the project, the Planning Assessment Commission said Rio’s plan to extend the life of mine was consistent with government policy and legislation.
However the PAC said approval is subject to the provision of additional information on a number of matters prior to determination as well as the imposition of stringent environmental requirements.
These include more information around a clear and transparent biodiversity offset strategy to ensure ecosystem and species credit requirements will be met. It is also recommending that Warkworth be required to provide evidence substantiating the viability of the proposed regeneration of important Endangered Ecological Communities and associated costings.
Further, the commission said the final legacy void should be reduced in size.
The commission said it recognises that the project will result in adverse social and economic impacts, particularly on the Bulga village and its residents, who are experiencing increasing mining encroachment from these and other mines.
“These impacts are likely to include impacts on property values; on the ability of residents to be able to sell their properties in the future; and environmental concerns, including notably noise and dust impacts,” PAC said.
“In light of these impacts, the Commission is of the view that consideration should be given to options to compensate residents and ameliorate as far as practicable these impacts.”
The PAC decision has caused anger in the small Bulga community, which successfully fought Rio’s plans to extend the mine last year in a David and Goliath battle.
The Commission noted that the relationship between the miner and the Bulga community has “deteriorated to the level where constructive discussion to resolve issues of significant concern to the community is difficult”.
The Commission says Rio “would be well advised” to pursue appropriate initiatives to rebuild their relationship with the local community.
It wants to see the miner commit to honouring the acquisition and mitigation rights provided to the residences under the repealed Warkworth Extension project.
PAC also says effective mine rehabilitation will also be important in getting the community back on side.
In justifying its decision to approve the mine expansion, PAC said the project would result in significant social and economic benefits including increased direct and indirect spending in the region of $719 million; the generation of around $617 million in state royalties; and a net economic benefit to NSW of $1.488 million.
NSW Minerals Council chief Stephen Galilee welcomed PAC's decision.
“Today, 1,300 workers at Mount Thorley Warkworth and their families are relieved to know that their economic future is a step closer to being secured for years to come,” Galilee said.
“Today’s decision by the PAC is great news for the mine employees and also for the ongoing economic stability of the the Upper Hunter. In 2014, Mount Thorley Warkworth spent $188 million with more than 270 suppliers in the Upper Hunter region.”
But Bulga Milbrodale Progress Association's John Krey said the community is extremely disappointed at the decision.
"This recommendation for approval has been the result of two years of work between Rio Tinto and the government in changing the rules to get a project, previously considered by the courts as unapprovable, recommended for approval," Krey said.
"It went through the Land and Environment Court, it went through the Supreme Court, and both those said the impacts are too great.
"And yet, now, we read in the recommendations that, considering everything, the impacts don't outweigh the financial side of it.
"So, clearly, the government is taking the money and they don't give a bugger about the people in the communities that have to live around these open cut mines."
Krey said the local community was committed to fighting the mine.
"We are looking at, firstly, the conditions that are being proposed and clearly there are some there that can be argued," he said.
"We will continue to fight this, as far as submissions to the Planning Assessment Commission, and to the Department of Planning.
"We've invested five years."