The long-awaited and controversial approval – which follows NSW government approval the expansion project in January – saw Whitehaven’s shares plunge 14c to $2.39.

Whitehaven and its 30% joint venture partner, Idemitsu, is seeking to expand the mine to the east and north of the existing mining area, increase the production rate from 2 million tonnes per annum of coal to 3Mtpa, and extend the project life from 2017 to 2030, outgoing managing director Tony Haggarty said.

“We welcome the federal government’s approval under the EPBC Act and are committed to working within the stringent conditions that have been placed on the project,” he said.

“We also welcome the approach both the state and federal governments have taken to the management of cumulative impacts with the nearby Boggabri and Maules Creek mines.”

The approval process for the project has included extensive community and stakeholder consultation, and specialist expert assessments of environmental impacts, according to the company.

A protest by local environmental group Front Line Action on Coal caused the shutdown of Tarrawonga mine on Monday.

The leader of Frontline Action on Coal, Jonathan Moylan, released a “hoax” financial announcement in January that caused Whitehaven Coal’s share price to drop dramatically.

Greens NSW senator Lee Rhiannon said the protest was necessary because the proposed Tarrawonga expansion would destroy 150 hectares of prime farmland and state forest.

“[The] action is needed because of the failure of the federal and the NSW governments to protect the local environment and take action on climate change,” Rhiannon said.

“The peaceful direct action at the main gate is a constructive way to highlight the need to protect this important food-producing region.

“We have no confidence that the federal approval process for Tarrawonga’s expansion will provide any meaningful environmental protection or properly consider the health and social impacts of this mine.”

The socio-economic assessment of the expansion indicates that the operation of the project would have a number of positive impacts on the Narrabri and Gunnedah regional economy, according to the company.

These include $490 million in annual direct and indirect regional output or business turnover, $27 million in annual household income, and 300 direct and indirect jobs.

The mine employs more than 150 staff and contractors – most of whom live in the local community, the company said.