Australia’s New South Wales Independent Planning Commission (IPC) has rejected planning permission for the underground mine proposed by Hume Coal , citing its potentially adverse environmental, social and economic impacts.

The planning regulator said that the impact of the proposed Hume Coal and Berrima Rail Project would be ‘too great’ to be managed reasonably and poses high social risks to the community.

It also believes that the $389.8m (A$533m) project would have a potential impact on groundwater stores and Sydney’s drinking water catchment.

The IPC said: “The Commission finds the issues relating to the impact on water resources and social impacts significant enough to warrant refusal.”

Moreover, the project’s potential greenhouse gas emissions have also been factored in by the regulator while making the decision.

The IPC added: “The project’s greenhouse gas emissions make it inconsistent with regional objectives for the promotion of sustainable development and, when weighted against the project’s relatively minor economic benefits, greenhouse gas emissions contribute to the land-use incompatibility of the project.”

The project was aimed at producing around three million tonnes a year of metallurgical coal for steel-making, and industrial coal for cement production and power generation.

Over an estimated life of 23 years, the mine aimed to extract approximately 50 million tonnes of run-of-mine coal.

The project also involved the construction of a rail loop to transport product from the site to Port Kembla.

In response to the decision by the regulator, Hume Coal said: “After ten years, this is a sad result, we are disappointed, to say the least.

“Over 700 people wanted to come and work for Hume Coal, we’re sorry that that doesn’t look like a possibility now.”

Hume Coal is a subsidiary of POSCO Australia, which is a unit of Korean company POSCO.