Planning and Infrastructure Minister Brad Hazzard said this followed the release of an independent report commissioned by the Department of Planning and Infrastructure which further scrutinised the project.

“I have issued the PAC with revised terms of reference and the PAC’s review will inform the Department of Planning and Infrastructure’s assessment of the project, with the final decision to be made by a differently constituted panel of the PAC,” Hazzard said.

“I have also directed the PAC to hold public hearings so community members can have their say.”

The decision by the minister is frustrating members of the cabinet, who have been trying to improve NSW as an investment destination after the Land and Environment Court stymied a proposed extension of Rio Tinto’s Mt Thorley-Warkworth complex in the Hunter Valley.

In an address to the AMEC 2013 conference in Perth this week, Resources and Energy Minister Chris Hartcher admitted that the state was facing “real issues” in terms of investment and exploration.

“The Australian Bureau of Statistics shows there’s been a 24% decline in exploration investment in NSW in the March quarter compared to the previous year and more significantly, Canada’s Fraser Institute ranks NSW as the lowest of all mainland states as an investment destination for mining,” he said.

“The market is tough because our principal product is thermal coal … and nobody wants to rush into that industry right now,” Hatcher said, adding that coal accounted for 35% of the state’s exports last year, generating about $14 billion.

It is situations like the Mt Thorley-Warkworth delays, Hartcher says, that discourage investment.

“If you’re an investor and you’re looking at those sorts of facts and figures, they are very challenging and we are very conscious of that challenge,” he said.

In May, Hazzard wrote to the independent PAC requesting that it defer its review of the proposed open-cut mine to allow the Department of Planning and Infrastructure to undertake further work on concerns raised in public submissions.

Hazzard said the adjacent horse studs formed part of the Upper Hunter’s equine critical industry cluster, as identified in the government’s Strategic Regional Land Use Policy.

The region’s thoroughbred industry is one of two CICs identified for heightened protection from mining and other resources activities, along with the winemaking industry.

“The department is currently in the process of reviewing the submissions received during the project’s public exhibition late last year, including detailed submissions from both the Coolmore and Darley studs,” Hazzard said.

“I’ve written to the acting chair of the PAC stating that the department is concerned the proposal does not adequately address impacts on the studs.

“To ensure a thorough review of all issues can take place, I’ve asked the PAC to postpone its review of the project.”