The NSW Independent Planning Commission has approved a proposal to extend the life of the consolidated Chain Valley and Mannering coal mines, south of Newcastle, until the end of 2029.
The Commission said the extension was necessary to keep supplying the nearby Vales Point Power Station "during NSW's transition to renewable energy".
Legislated emissions reduction targets for the state don't kick in until 2030, meaning none of the coal extracted from the mine will be counted in those assessments, the commission said on Thursday.
But environmental campaigners might already be preparing to challenge the commission's decision, with a state Greens MP saying the approval risks breaching climate laws.
"The state's top legal minds are clear that any new coal is inconsistent with the current law," Sue Higginson said.
"It is therefore highly likely that if tested, this coal approval would be declared unlawful.Â
"I have no doubt that environmental defenders will be considering heading to the courts right now, to uphold the climate and environmental laws of the state."
The NSW Net Zero Commission found in December any increase in coal mining activity would leave the state at odds with the Climate Change Act and the Paris Agreement.
While the mine has been cleared for two extra years of digging, its operator, Delta Power and Energy, did not get everything it was seeking.
The commission denied its application to allow coal from the mine to be exported, largely because the increased emissions from trucks transporting the coal to the Port of Newcastle would have too great an impact on residents.
Vales Point is supplied directly from the mine by conveyors, meaning no trucks are required.
Climate group Lock the Gate hailed the export ban as an historic first for NSW.
"This is an important step and reflects the growing pressure on decision makers to take the climate impacts from coal mining seriously," co-ordinator Nic Clyde said.
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