A Hunter Valley community has lost its legal challenge to a major open-cut coal mine expansion by Chinese-controlled miner Yancoal - although final conditions on the project remain to be settled.
The Land and Environment Court on Wednesday dismissed an appeal by local residents against the company's South East Open Cut expansion of its Ashton Coal Mine near the hamlet of Camberwell.
Initially rejected by the Planning Assessment Commission in December 2011 on the advice of NSW Health and NSW Water, the court last September ruled the commission's decision invalid because it had failed to consider additional material opponents say was added hours after its ruling.
However, the decision by Justice Nicola Pain was conditional. The parties will meet on Friday to set a timetable to resolve the outstanding matters involving the 315-hectare project.
"On balance, I consider that approval can be granted but that approval must be subject to adequate conditions about which a number of issues of clarification and possible alteration remain," Justice Pain said in her ruling. "Final orders in relation to disposition of the appeal will be made when conditions have been finalised."
James Rickards, Yancoal's general manager for investor relations, said the company would take "the appropriate time to review [Wednesday's] determination".
The project gained approval from the PAC in October 2012 "following a thorough environmental assessment and compliance with all regulatory requirements" and would create about 160 new employment opportunities at the site, Mr Rickards said.
A spokeswoman for the Planning Department said the court had endorsed the process undertaken: "We have always maintained that the PAC's decision to approve the project was appropriate."
According to the NSW Environmental Defenders Office, the appeal focused on the impacts of the mine on the health of residents because of dust emissions, the loss of Aboriginal cultural heritage, reduced agricultural output, threats to the Hunter River and other water sources, and the economic justification for the project.
"While the prospect of this mine being approved is disappointing for the Camberwell community, the wine growers and farmers downstream of the mine, there is still some scope for setting conditions designed to minimise adverse impacts on air and water quality and prime agricultural land," Sue Higginson, principal solicitor at the EDO, said.
The Ashton Coal Mine expansion project totals about 16.5 million tonnes of coking coal – or about seven years' production. "However, opportunities may exist for additional open cut mining after the completion of the (expansion) subject to further exploration and feasibility studies", the company said on its website.
Residents say they will maintain their opposition to the expansion.
"Yancoal has not beaten us. We will continue to fight the mine knowing that we're doing the right thing by our community and by the future generations," said Wendy Bowman, an 80-year old farmer.
Ms Bowman's land sits on top of 60 per cent of the additional coal reserves, and she refuses to sell her farm.
"My family has been in this valley for six generations," Ms Bowman said in a statement. "I have already had to move twice for mines, but this time I will stay and defend my land, our water and local heritage."