The Mandalong southern extension project would see the extraction of up to 12 million tonnes of thermal coal over 25 years at the existing rate of a million tonnes a year. It would result in the creation of an additional 115 jobs. That boost to employment was one of the main reasons given for the approval.

"The commission is satisfied that the project's benefits outweigh its potential impacts, and on balance should be approved subject to conditions," the commission's review report concluded.

"Overall, the proposal would have a positive contribution to the region and the state of NSW, particularly in relation to local employment opportunities and in maintaining coal production in the Newcastle region."

The commission identified subsidence-related impacts, water quality impacts and noise as "key issues that require further consideration and assessment".

It would seek advice on the extent of likely repairs to homes and electricity towers caused by subsidence, "prior to any determination".

It recommended that further assessment of discharge into Muddy Creek be undertaken, or alternatively that any consent requires that any discharge is treated "to ensure nil additional impact".

And it recommended that alternative noise mitigation measures be considered during the construction phase. The "changing economic circumstances" prompted the commission to call on an updated economic analysis of the project prior to determination, as well as a peer review of that assessment.

At a public hearing on the mine extension proposal in February, locals called on Centennial Coal to fund local infrastructure to compensate the community for the projected increase in heavy truck traffic.

The commission acknowledged that request in its report, suggesting the construction of a shared pathway adjacent to Mandalong Road for horse riding, cycling and walking from the proceeds of the company's $500,000 community fund.