The proposal is to produce up to 10 million tonnes per annum of semi-soft coking coal and high-grade thermal coal from an open-cut mine for 18 years.
The IESC was requested by the federal Department of Agriculture, Water and the Environment and the Queensland Department of Environment and Science to provide advice on the proposal.
The IESC raises concerns that the mine would release pollutants into rivers and creeks that feed into the Great Barrier Reef World Heritage Area and drain creeks by up to 60m and dewater aquifers relied on by farmers.
It also states that the mine would physically remove more than eight kilometres of a local creek and threaten vulnerable arboreal animals like the koala and greater glider.
"The project presents very significant risks to nationally and internationally recognised assets with high ecological values, including the GBRWHA and the Broad Sound Fish Habitat Area downstream of the project", it states.
"Proposed mitigation options primarily entail offsetting residual impacts (for example for the 8.35 km of stream-length that will be removed) and are likely to be completely inadequate for this region because of its relatively undisturbed setting."
Lock the Gate Alliance Queensland spokeswoman Ellie Smith said it was unusual for the IESC to be so critical of a planned project.
"The unprecedented severity of the IESC's criticism of the Central Queensland Coal Project in the Styx Basin proposal clearly demonstrates just how destructive it would be," she said.
"This is an incredibly dangerous proposal to build a mine just 10km from the Great Barrier Reef World Heritage Area that poses a massive pollution risk.
"Our Reef is far too precious to be put at the mercy of Clive Palmer.
"Mr Palmer's companies have an appalling track record of planning environmentally insensitive coal mines in Queensland, even though he's yet to actually go ahead and build any of them.
"In response to this damning environmental assessment, the Palaszczuk and Morrison governments must stand up to Clive Palmer and reject this terrible proposal now."
Queensland's Department of Environment and Science said it was due to decide by the end of next month whether the miner could move on the next stage of its application.
