The Anvil Hill coal mine at Wybong, 20km west of Muswellbrook, will produce up to 10.5 million tonnes of coal per annum over 21 years.

After posting disappointing results over recent months, Centennial has repeatedly cited Anvil Hill as a "lower risk" turnaround project, which will produce at least one-third of the company's longer-term output.

The proposal is for four mining pits and construction of a coal handling and preparation plant.

Anvil Hill has been subject to a rigorous environmental assessment process and has been widely opposed by environmental groups who claim it ignores the dangers of climate change and water shortages.

Greens leader Lee Rhiannon said yesterday the decision to approve the mine had left the state governments environmental credentials "in tatters."

"The approval sets NSW down the path of no-return. Our state's future has been hijacked by today's announcement," Rhiannon said.

"While approval has been granted, the fight to stop this and other mines has just begun."

Planning Minister Frank Sartor said the Department of Planning had imposed 84 strict conditions on the mine, to manage a range of potential impacts on the environment and community.

Centennial says the project has now cleared every scientific, environmental and technical hurdle, including water management and usage.

“With 200 direct construction jobs, up to 240 operational jobs and the potential of 1000 indirect jobs, the Anvil Hill Mine will be a significant contributor to the local, regional and state economy,” the company said yesterday.

“The project will deliver annual direct wages equal to $25 million and an estimated $380 million in royalties over the 21-year life of the mine to the NSW State Government.”

Donaldson’s Abel bord and pillar mine, near Cessnock, will produce up to 4.5Mtpa for 21 years, generating around 70 construction jobs and 375 operational jobs.

The company currently owns and operates the Donaldson opencut mine, which has current reserves expected to last until 2012.

The mine will utilise existing areas within the Donaldson mine lease for surface infrastructure and the existing Bloomfield coal handling and preparation plant, rail loader and rail loop for coal processing and loading.