The Planning Assessment Commission (PAC) of New South Wales has rejected Anglo American's Drayton South coal mine and Coalpac's Cullen Bullen coal mine projects in the Blue Mountains.
Drayton South's coal mine proposal has been rejected as it could pose a threat to the thoroughbred racehorse and tourism industries.
The commission said: "The project has not demonstrated that it will not adversely impact on equine health and the
operations of the Coolmore and Darley horse studs."
Anglo American had approached the commission to extend the life of its Drayton mine, which was due to reach the end of its life next year, and had been previously approved by government regulators, reported Reuters.
Anglo American coal business CEO Seamus French said: "This has gutted our 500-strong workforce and their families.
"It is devastating for our employees, it is devastating for our suppliers, it is devastating for the local community and it is devastating for the people of NSW who would have benefited from the annual $35 million in state government royalties from the project."
New South Wales Minerals Council said in a statement: "Over 4,000 jobs have been lost at NSW mining operations over the last two years, with over 2,500 coal jobs lost in the Hunter alone.
"This decision will add hundreds more people to the growing ranks of Hunter jobless, at a time when unemployment in the region is rising and more jobs are needed, not less."
According to PAC, the Drayton project does not provide sufficient information on the impact of mining activities, show economic benefits and is not in the public interest.
The decision by NSW PAC to reject Coalpac's mines could put the company into liquidation.
NSW Minerals Council CEO Stephen Galilee said: "Today's PAC outcomes on the Drayton South and Coalpac projects are a brutal double-blow for working people in regional NSW, and suggests that the NSW Government is prepared to stand by and do nothing while hundreds lose their jobs."