Federal environment minister Sussan Ley made the approval under the Environment Protection and Biodiversity Conservation Act.
The approval will allow Glencore to mine an extra 52 million of coal by establishing an open cut to the north of the existing Mangoola operation.
The federal approval follows an earlier NSW Independent Planning Commission approval.
"I accepted the departmental advice, including from the department's Office of Water Science that the areas of further work required, and recommendations made by the IESC [Independent Expert Scientific Committee], have mostly been addressed by the NSW assessment process, and the conditions attached to the NSW development consent," Ley said.
A Glencore spokesman said the company would look to finalise the remaining approvals for the Mangoola Coal continued operations project to enable work to start.
"We have invested more than five years of detailed studies and consultation in the project, which secures ongoing employment for Mangoola's current workforce of approximately 400 employees, more than 100 construction jobs, and continued support for more than 330 Hunter businesses," he said.
"The project will not change current approved maximum production levels or train movements, and will use existing major infrastructure, such as the coal preparation plant, rail loop, workshop, emplacement areas and administration facilities."
The coal mined at Mangoola over the next four years will offset closures and reduced output at a number of other Glencore operations, including Newlands (due to close in 2023), Liddell (2023) and Clermont (2026).
"Continued operations at Mangoola were factored into Glencore's August announcement on climate change that increased our medium-term target to a 50% reduction in Scope 1, 2 and 3 emissions by 2035 and introduced a new short-term target of a 15% reduction by 2026," the spokesman said.
