A coal mine proposed for the NSW Hunter Valley has been rejected by planners who ruled the 100 million-tonne project was a threat to the region's thoroughbred and tourism industries and against the public interest.

The NSW Planning Assessment Commission issued a final project refusal for the controversial Drayton South mine on Tuesday, ending more than a year of uncertainty over the project that has pitted miners against horse breeders.

Racehorse breeders, including the internationally renowned Darley and Coolmore studs, had fiercely opposed the plan, arguing resultant noise and pollution would force them out of the Hunter Valley.

Mine site owner Anglo American had argued the Drayton South mine was an extension project essential to protect 500 jobs at its existing Drayton mine, which is due to end production in 2017.

The NSW Department of Planning controversially gave conditional approval for the mine in 2013 despite a PAC recommendation against the plan.

Tuesday's final determination now ends the proposal.

In its reasons for refusal, 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 adversely impact on the health of horses and the studs' operations 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.

Thoroughbreds and winemaking are considered Critical Industry Clusters that are protected by regulations from the impacts of mining.

"The project is not in the public interest", it concluded.

A spokeswoman for Anglo American said the company is "very disappointed with the result".

Hunter Thoroughbred Breeders Association president Cameron Collins said the refusal is a milestone decision that reinforces the regional and national significance of the Hunter as a hub for the breeding industry.

"This has been a long and stressful process for all involved," Dr Collins said.

"We now look forward to building a sustainable future for our region."

The Lock the Gate Alliance - which had campaigned with breeders and winemakers against the mine - has also welcomed the refusal.

"This decision is a welcome relief for the businesses and communities that were directly threatened by this mine," Lock the Gate NSW co-ordinator Georgina Woods said.