The IPC determined to refuse development consent, concluding the $533-million Hume Coal and Berrima Rail project "does not achieve an appropriate balance between relevant environmental, economic and social considerations".

Hume Coal had sought planning approval to extract approximately 50 million tonnes of run-of-mine coal over 23 years from the new underground mine 7km northwest of Moss Vale.

A rail loop had also been earmarked for the site so that coal could be transported to Port Kembla.

Submissions in support of the project primarily related to the economic benefits to the region and NSW, including employment generation and flow-on benefits to local businesses; coal as a strategic resource, including for steel production and electricity generation; and the suitability of the mining method for managing subsidence and a range of other environmental impacts.

However, the IPC said ultimately it found that the stated benefits of the project do not outweigh the adverse environmental, social and economic impacts.

 "[O]n the basis of the Material considered as a whole, the Commission has determined to refuse the… Applications.

"[T]he impacts of the project cannot be reasonably and satisfactorily avoided, mitigated and managed through conditions."

A spokesman for Hume Coal said the company is disappointed with the decision.

"The IPC are the consent authority and we respect their decision," he told Australia's Mining Monthly. 

"But knowing that doesn't help with the disappointment in not being able to construct a new low environmental impact mine and bringing 300 FTE [full time equivalent] jobs to the Southern Highlands for a generation.

"We will review the report and consider our options over the next few days."

A whole-of-government assessment by the Department of Planning, Industry & Environment in June found the project was not in the public interest and should be refused.

The state significant development applications for the project came to the IPC for determination because of strong opposition from Wingecarribee Shire Council and the local community.

Commissioners Peter Duncan, Professor Alice Clark, and Chris Wilson met with the Hume Coal, the DPIE, Wingecarribee Shire Council, Coal Free Southern Highlands, independent experts in mining engineering and groundwater, and the DPIE Water as part of their determination process.

Key issues raised by those opposed to the project included mine design; subsidence; groundwater drawdown; risks to surface water, including to Sydney's drinking water catchment area; impacts to local biodiversity; greenhouse gas emissions; impacts to Aboriginal and historic heritage; amenity impacts; adverse impacts to existing industries, including tourism and agriculture; and social impacts.

The IPC found that the project will result in unacceptable groundwater impacts because groundwater modelling is limited by the parameters applied, lack of input data and the level of sensitivity analysis.

Given these limitations it is uncertain if the model is able to accurately predict the drawdown impacts, it said.

"[T]he Commission finds the issues relating to the impact on water resources and social impacts significant enough to warrant refusal," it stated.

"Further, the Commission finds that the project's incompatibility with the land use objectives for the area is also reason enough for refusal, and that this incompatibility is exacerbated by the groundwater and social impacts."