The IPC refused the development consent from Kepco Bylong Australia Pty Ltd to develop an open cut and underground facility in the Bylong Valley, citing concerns about long-lasting environmental, agricultural and heritage impacts.

The company had sought approval to extract up to 120 million tonnes of run-of-mine coal over 25 years for the thermal export market.

The NSW Department of Planning, Industry and Environment referred the state-significant DA to the IPC for determination in October last year because of significant community opposition.

Commissioners Gordon Kirkby (panel chair), Wendy Lewin and Stephen O'Connor were appointed to determine the application.

They met with the applicant, the department, Mid-Western Regional and Muswellbrook Shire councils and the Bylong Valley Protection Alliance to discuss the proposed mine and conducted an inspection of the site and surrounding area.

The IPC also hosted a public meeting, which raised the issues of the loss of prime agriculture land; air quality and greenhouse gas emissions; biodiversity; groundwater and surface water impacts; heritage impacts; noise and blasting; and economic and social benefits, including job creation.

After considering all the evidence and weighing the community's views, the commission determined to refuse development consent for the mine on Wednesday.

The NSW Minerals Council was quick to air its grievance with the ruling.

"This refusal is a massive lost opportunity for the local region and, in particular, the communities of Kandos and Rylstone where the economic injection from the jobs and investment associated with the project are desperately needed," CEO Stephen Galilee said.

"It comes after more than seven years of assessment, including repeated changes to the processes and requirements during this period, highlighting just how difficult and complicated the current NSW planning system has become.

"Despite support from the local community, local MPs, local council, local businesses, and the Department of Planning, Industry and Environment, which assessed that the project was approvable with conditions, it's been refused by the delegated authority of the IPC, acting on behalf of the NSW Government but with no accountability to either the government itself or the public.

"The role of the IPC demonstrates how the NSW Government has allowed the economic future of regional NSW, and communities like Kandos and Rylstone, to be left at the mercy of an unelected and unaccountable body, with no legal obligation to abide by any of the policies of the elected government of the day."

But, not every local agreed with the NSW Minerals Council.

Bylong Valley landholder and sheep farmer Phill Kennedy welcomed the IPC's verdict.

"We're over the moon that the commission has made the right decision," he said.

"This valley is hugely productive and stunningly beautiful.

"Thanks to this sensible decision, it's going to keep producing food and wool for NSW for a long time to come.

"The productivity of the valley will also greatly increase when properties come back into private hands again, rather than those of Kepco."

Warwick Pearse from Bylong Valley Protection Alliance echoed Mr Kennedy's sentiments.

"We applaud the IPC - this is a wonderful decision," he said.

"Bylong Valley will be safe from mining and continue to be the productive and beautiful valley it has been for many years.

"It underlines the need to actually give legal protection for prime agricultural land.

"This farmland should never have been put at risk in the first place."

While the commission found the mine's predicted air quality, biodiversity, noise, subsidence and visual impacts were acceptable and/or could be effectively managed or mitigated, it raised significant concern about other longer-lasting environmental impacts.

In its Statement of Reasons for Decision, the IPC found (in summary):

* The groundwater impacts would be unacceptable;

* No evidence to support the Applicant's claim that impacted Biophysical Strategic Agricultural Land (BSAL) can be rehabilitated post-mining to BSAL-equivalent;

* Given the expected level of disturbance to the existing natural landscape, the commission does not consider that a recreated landscape post-mining will retain the same aesthetic, scenic, heritage and natural values; and

* Greenhouse gas aspects of the project remain problematical.

The commission acknowledged the anticipated economic and social benefits to NSW during the life of the mine - including the creation of hundreds of jobs and the payment of royalties totalling up to $290 million.

However, it found the environmental impacts, particularly on groundwater and productive agricultural land, would last long after the mine was decommissioned.