It is projected the Russell Vale Underground Expansion project will deliver a net economic benefit to the state of up to $174 million and create ongoing employment for 205 people.
The NSW Department of Planning, Industry & Environment finalised its whole-of-government assessment of the state significant development application in September this year.
It came to the IPC for determination because there were more than 50 "unique" public objections to the proposal.
The key issues of concern raised at the public hearing and in written submissions to the IPC included water resources, subsidence, air quality, greenhouse gas emissions, biodiversity, bushfire risk, mine waste, noise, visual amenity, socio-economics and traffic and transport.
The IPC approved the expansion, subject to 118 conditions.
In its statement of reasons for decision, the IPC concluded that: "on balance, and when weighed against the objects of the [Environmental Planning & Assessment] Act, ecologically sustainable development principles, the relevant policy framework, and socioeconomic benefits, the impacts associated with the project are acceptable and the project is in the public interest.
"[T]he project would result in some amenity impacts and additional environmental disturbance associated with recommencement of mining operations at the site in accordance with the proposed mine plan … [however] the commission is of the view that the additional environmental and amenity impacts can be appropriately managed and mitigated in accordance with the applicable guidelines and policies," the IPC stated.
In making its determination, the IPC said the bord and pillar mining method was unlikely to cause significant surface subsidence or significant interaction with the overlying coal seams and the applicant had employed all feasible and reasonable measures to avoid swamp impacts by adopting the bord and pillar mining method and considered this substantially reduced the risk of impact to swamps as a result of the proposal.
"The commission has imposed the department's recommended conditions and additional conditions to ensure that the project complies with the relevant criteria and standards, that impacts are consistent with the predictions in the [Revised Preferred Project Report] including supplementary material and that residual impacts are minimised, mitigated and - where relevant - compensated for," the IPC said.
Lock the Gate Alliance said the Russell Vale expansion would require 50 million litres of water over its five-year lifespan.
"However, predicted long-term water discharge from the mine workings will occur and continue long after mining has ended, likely in perpetuity," the group said.
"There are also major issues with the company itself and its previous behaviour, which the IPC was not able to take into consideration when making its decision.
"Wollongong Coal is likely trading while insolvent, has a multibillion-dollar debt problem, recently delisted itself from the ASX due to the costs of remaining listed, and questions remain about the true cost of rehabilitation at its existing mine site."