Mining companies have lashed out at planning authorities who banned coal mine proposals in NSW, calling the decision “brutal”.

Coal miners have launched angry attacks on planning authorities and the NSW government after a proposed mine was refused because it posed a threat to key racehorse and tourism industries.

The independent Planning Assessment Commission refused permission for Anglo American’s proposed Drayton South open-cut coal mine in the NSW Hunter Valley on Tuesday, saying it was not in the public interest.

As horse breeders and grape growers celebrated, Anglo American coal business chief executive Seamus French made a scathing attack on the planning process.

“This has gutted our 500-strong workforce and their families,” Mr French said.

Mr French said the rejection of the 100-million-tonne mine was devastating for Anglo American employees, suppliers and the local community.

“Unemployment in the Hunter Valley is eight per cent,” he said.

“To reject a project which would continue to provide 500 full-time jobs for a period of 20 years is incomprehensible.”

Mr French said the PAC process “is damaging communities and threatening NSW’s investment potential”.

The PAC also refused a proposal by mining company Coalpac to extend the lives of two mines northwest of the Blue Mountains town of Lithgow.

The PAC said the proposals to expand the Invincible Colliery and Cullen Valley Mine would result in clearing of 150ha of the Ben Bullen state forest and put high-value stone “pagoda” formations at risk in the nearby Gardens of Stone national park for limited short-term benefits.

The NSW Minerals Council called the Coalpac and Anglo American decisions “a brutal double blow” for regional NSW workers.

Minerals Council CEO Stephen Galillee said more than 4000 jobs had been lost in the NSW mining industry in the past two years.

“These outcomes make a mockery of the claim that NSW is open for business and send a very damaging message about the future of NSW as a place for investment,” Mr Galillee said.

Workers have been laid off as a fall in coal prices affects the viability of mining projects.

NSW Planning Minister Pru Goward said she was satisfied the PAC had exercised its duty as the independent decision-maker.

Ms Goward said the state’s top-ranked economy was proof that it is open for business.

The Drayton South decision ends uncertainty in which the region’s two biggest thoroughbred studs, Coolmore and Darley, threatened to leave if the mine proceeded, leaving the entire industry unviable.

The PAC said there was not a big enough buffer between the mine and horse studs, that the mine had not shown it would not affect the health of horses and that proposed monitoring of impacts was “not acceptable” because damage would be irreversible.

“The economic benefits of the project do not outweigh the risk of losing Coolmore and Darley and the potential demise of the equine industry in the area, with flow-on impacts on the viticultural tourism industries,” the PAC said.

Hunter Thoroughbred Breeders Association president Cameron Collins said the refusal reinforced the significance of the Hunter as a hub for the breeding industry.