The approval, however, is subject to six conditions which include measures for tighter noise and air-quality management as well as stricter management of the huge ”final void” or hole left behind.
Mount Thorley Warkworth general manager Mark Rodgers said: "We will thoroughly review the Planning Assessment Commission’s report over the coming days and assess the detail of the findings."
The company plans to produce 10mt of thermal coal per year from the Mount Thorley Warkworth mine. The existing permit for the mine is due to expire in June 2017.
In June 2014, the company submitted a revised application to the NSW to extend the life of its coal mine by 20 years.
The re-submission follows rejection of the Warkworth extension plan by the NSW Land and Environment Court (LAEC) which claim that the environmental and social costs would overrun economic benefits.
The Planning Assessment Commission said earlier that the expansion would include extraction of a further 230mt of coal over a period of 21 years.
NSW Coordinator for Australian community action group Lock the Gate Alliance Georgina Woods said: "Despite securing approval for multiple large scale expansion projects, and increasing production levels, and coal the industry has shed 4,000 jobs in the last two years.
"Approving this project does not solve that problem: the Hunter region is slipping into a crisis that must be urgently addressed."
Commissioned in 1981, the Mount Thorley Warkworth is an integrated operation of two open-cut mines.
Located adjacent to each other, 15km south west of Singleton in the Hunter Valley region of NSW, the Mount Thorley Warkworth is 80% owned by Coal & Allied Industries and 20% owned by Posco Australia.
Image: Rio Tinto’s Mount Thorley Warkworth coal mine in Australia. Photo: Copyright © 2014 Rio Tinto.