THE Cobbora coal mine near Dunedoo has been approved by the NSW Planning Assessment Commission provided it meets conditions.
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Although the State government's sale of the project created uncertainty, the commission believes the coal market will determine the mine's viability and timing.
In its report, the commission said it approved several recommendations by the Planning and Environment Department including that Cobbora Coal "would generate economic benefits for the state and the region that outweigh the social costs".
However, the commission was disappointed with Cobbora Holding Company about its failure to establish a land management plan and lack of public consultation.
The commission called for the plan in April 2013 after a review of the $1.5 billion proposed mine.
When commissioners Paul Forward, David Johnson and Gabrielle Kibble visited the site earlier this year they said a plan should be implemented as a priority.
"The commission observed agricultural lands that were, and were not, currently being farmed," the report said.
"The commission also noted vacant businesses within the township of Dunedoo."
Concerns were also raised about depopulation in the region.
Predicted social and environmental impacts from the proposal could be mitigated to an acceptable level, the commission said.
It also requested Cobbora's community consultative committee include a farming representative and a river monitoring committee be set up within three months of construction starting.
Nature Conservation Council of NSW campaigns director Kate Smolski said the commission's determination the economic benefits of the mine outweighed the environmental and social costs highlighted flaws in the system.