Getting PAC approval is typically the biggest hurdle in the state’s greentape regime. In October, the independent commission overruled NSW planning department recommendations in rejecting plans to extend the Drayton, Invincible and Cullen Valley coal mines.

The PAC made various recommendations in granting two project approvals for MTW, including that Rio considers compensation arrangements for residents and property owners of the Bulga village which is expected to be the most impacted from the mine extension plans.

The commission also concluded that Singleton and Cessnock would face “substantial adverse economic impacts” if the plans were not approved.

Rio has welcomed the PAC’s decision, however, MTW general manager Mark Rodgers is waiting for the final sign off.

“While the PAC’s recommendation is a positive step for Mount Thorley Warkworth, it is absolutely critical that a final decision is now made as quickly as possible,” he said.

“We are reaching the point where the shape of our existing Development Consent footprint means the area we can mine in will narrow over coming months, making it increasingly difficult to maintain existing production and employment levels.

“We’ve now been trying to secure the future of Mount Thorley Warkworth for more than five years and the NSW Department of Planning and Environment has previously recommended that our application should be approved.”

He also thanked the 2000-plus people and businesses who made submissions in favour of the extended mining plans.

Rio had applied to maintain existing production rates of 18 million tonnes per annum run-of-mine from the Warkworth mine and 10Mtpa ROM from the Mount Thorley open cut with the expansion areas falling on land owned by the mines and within existing mining leases.

Rodgers said saleable coal output from MTW, which supplied premium thermal coal on long term contracts to Japan, would remain at about 12Mtpa if mining was permitted to continue.

“We will be paying particular attention to the Planning Assessment Commission’s findings regarding the community of Bulga and we have already been acting on one of its key recommendations, by offering voluntary acquisition to those residents who were granted acquisition rights under the Warkworth Extension 2012 planning approval,” Rodgers said.

NSW Minerals Council CEO Stephen Galilee said 85% of the 1891 public submissions to the MTW continuation projects were supportive.

“1300 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,” he said on Thursday.

“Today’s decision by the PAC is great news for the mine employees and also for the ongoing economic stability of the Upper Hunter. In 2014, Mount Thorley Warkworth spent $188 million with more than 270 suppliers in the Upper Hunter region.

“Hundreds of Upper Hunter residents employed by the local businesses, who supply Mount Thorley Warkworth, will also now breathe a sigh of relief that their jobs are also looking more secure.”

While the NSW Supreme Court upheld a Land and Environment Court decision to halt MTW extension plans in April last year, the state government since passed planning policies that made economic benefits the "primary consideration" – a move that helped underpin the recent PAC outcome.

Meanwhile, the Bulga Milbrodale Progress Association has promised “peaceful direct action” to halt the mining expansion.

Its spokesman John Krey told Fairfax Media that the PAC approval was confirmation that the mining-related planning system was broken.

"With every other avenue to protect our homes and peaceful valley from this massive open cut coal mine exhausted, we are left with no choice but to draw a line in the sand," he said.

"We have fought this project in court, and won twice, but despite this the NSW government changed the rules to push it through, quashed our rights to appeal in court, and worked behind closed doors with mining giant Rio Tinto to ensure it proceeds."