While there is more detail in the 43-page Director-General’s environmental assessment report on the project, Kelly outlined the general reasons for his decision in his project refusal letter.

His first point was the uncertainty around the subsidence predictions for the project, particularly in the “western portion of the site under Jilliby conservation area and the Wyong state forest”.

Kelly said the project did not adequately address potential surface water quality impacts, resulting in uncertainty for the proposed mine to meet acceptable “water quality outcomes”

He noted there was uncertainty around ecological and heritage impacts, especially in the western area of the site, due to lacking survey efforts combined with the uncertainty over subsidence in this area.

Based on these determinations, Kelly said the project was not considered consistent with the principles of ecologically sustainable development and therefore not considered to be in the public interest.

While the decision is obviously a blow to the Wyong Areas Coal Joint Venture, it also holds potential ramifications for future longwall projects in previously unmined terrain types of the state.

Modelling for subsidence in the Central Coast longwall project was difficult as there was no recorded subsidence data for the Wallarah and Great Northern coal seams.

Consultancy Strata Control Technologies used a numerical model using data from mining of the Greta and Bulli seams and the Incremental Profile Method used was also calibrated with two different scenarios.

But the Planning Assessment Commission and the Department of Environment, Climate Change and Water raised concerns the two scenarios did not apply to the vegetated hilly areas found in the western area of the project.

“The absence of a geological case representative of this part of the site, and calibration of the IPM model with such a case, represents a significant additional area of uncertainty with the modelling approach and results,” the Department of Planning said in its assessment report.

However, the PAC noted that mining would not take place in the western area for 12-15 years after mining started, providing opportunities to conduct better modelling for the western area using an adaptive management approach.

But the department did not look upon this favourably.

“Deferring a ‘comprehensive assessment’ of impacts to a future date is not advisable, and instead should be provided upfront before any planning approval is granted that foreshadows mining in these areas,” the department said.

A lot of community concern on the project has centred around potential impacts on the Central Coast water supply.

Despite some uncertainty, the department concurred with the PAC’s assessment that there were not likely to be any significant impacts on the streams which flow into the region’s water supply from subsidence in the western part of the project.

But the department said the Wyong Areas Coal JV did not adequately demonstrate that the proposed water treatment systems at the mine would be capable of treating wastewaters to an acceptable standard.

The department added that the impacts of treated water if discharged into the environment were not considered.

The PAC completed its assessment report in November and released it last week on its website.

The commission had noted limitations with certain aspects of the JV’s environmental assessment report completed for the project and requested additional separate studies and reports to finalise its review, making 40 consent condition recommendations as a consequence.

Ultimately the PAC found that subsidence, water, air, noise, ecological and coal transport-related impacts could be manageable.

Reactions to the decision

The rejection of the project also comes at a time when the latest Galaxy poll predicts the NSW Labor party will receive a record low primary vote of 23% at the March 26 election, making it lose government with 16 out of 93 lower house seats.

Federal Labor member for Dobell, Craig Thomson, was pleased with Kelly’s decision.

“I made a commitment to stop this mine at the federal election but I am glad we have been able to work together to stop the mine before any federal intervention was necessary,” he said.

Kelly noted that out of 249 submissions received on the project, 229 were from the public and 220 of the total submissions were objections.

“Despite concluding the project could be approved, the PAC had expressed its concern at the level of information supporting the proponent’s application,” Kelly said.

“The PAC indicated in its review that, due to the lack of information, a very large number of conditions would be required, should approval be granted.

“My position however, is rather than attempting to ensure nothing goes wrong by compensating for a lack of certainty with a very strict approval regime, the project in its current form should instead be refused.

“I am simply not prepared to take risks with the state’s precious environment.”

Wallarah 2 environment and community manager Peter Smith was bitterly disappointed.

“We will closely examine the decision by the minister and consider our options,” he said.

“This has been the most rigorous approval process ever undertaken in Australia and has included a strategic inquiry into mining in the Wyong area as well as a Planning Assessment Commission process for this project, whose report recommended approval.

“Both inquiries and two independent water reviews all found that there was sufficient information for mine to be approved.

“The decision will send very negative messages about NSW to the investment industry.”

He revealed that about $A90 million had been spent over 15 years on exploration and studies.

The longwall project was expected to generate $1 billion into the local economy over the first three years of construction, and create 300 direct jobs and another 700 indirect jobs in the wider community.

Kores Australia owns 82.25% of the JV and has been patiently progressing the project for many years. It was an original shareholder at the outset when the JV was awarded the exploration tender for the area by the NSW government in 1995.

The Wallarah 2 project application was first submitted back in late 2006 and the proposal has been further refined to ensure that all relevant environmental planning constraints are appropriately addressed.

Since 2003, there has been vocal environmental opposition to gas extraction in the area proposed by other groups. Subsequent community concerns then focused on the Wallarah 2 coal mining proposal, leading to the uncommonly protracted and detailed scrutiny of the project application.