A judgement in the NSW Land and Environment Court this week will have significant financial impacts fof the region's coal mining companies

A judgement in the NSW Land and Environment Court this week will have significant financial impacts of the region's coal mining companies.

In the case before Justice Moore in Mangoola Coal Operations Pty Ltd v Muswellbrook Shire Council, the Council was successful in claiming land the coal mine considered as agricultural was in fact a coal mine.

Justice Moore said in his judgement that the dominant use of the land operated by the mining giant Glencore's Mangoola Coal Operations was a coal mine.

Land used for coal mining purposes has a higher rateable charge in comparison to land used for agriculture.

Glencore had argued in their court submissions that 4150 hectares of 6600ha site near Wybong was in fact used by their agricultural company Colinta Holdings for the purposes of grazing cattle.

By way of background Colinta operates across three million acres running up to 50,000 head of cattle - a pastoral holding which is probably the largest of any of the country's mining companies.

The company has properties in Hunter Valley and Mudgee district surrounding their coal mining operations plus vast tracts of land in Central Queensland and the North Territory.

In NSW the company runs between 5000-6000 head of cattle depending on the season.

However Muswellbrook Council successfully argued that the land was not used for agricultural purposes but rather related to coal mining activities.

Part of this was due to a lack of cattle on the property, the 'artificiality by which Colinta financial accounts do not reflect' a profitable farming enterprise and the fact the land contained mining monitor equipment including air quality and water monitors.

Council's legal team also said bio-diversity offset land was in fact coal mining related not agricultural land.

The outcome of this case, if it is not subject to a successful appeal, could see mining companies have to pay higher rates on much of their land.

Muswellbrook Shire Council Mayor Martin Rush said "Council is naturally delighted with the decision. This was litigation brought by Glencore against Council for categorising buffer land around Glencore's Mangoola Coal Mine as mining rather than as farming."

"Glencore had lobbied the Valuer-General to include biodiversity offsets in a single buffer rating parcel that also included land licenced to its pastoral company, Colinta. Glencore had inaccurately, told the Valuer-General, the land was being exclusively used for farming and not mining purposes.

"The biodiversity offsets represent approximately 30% of the total rating parcel and cannot be used for farming. Council inspected the properties and could see no significant evidence that farming was taking place but did see considerable evidence of mining activities.

"The biodiversity offsets were only being used for mining purposes. Accordingly, Council rated the property as mining. The Court, after carefully reviewing all the evidence, has agreed with Council.

"This is a significant win for the community and will give greater confidence to the community that mines use their considerable buffer land purposefully for generating economic activity and employment rather than is some imaginary way or simply to reduce a mine's taxation liabilities.

"Given the acrimonious way in which Glencore has fought the case, we anticipate there may be an appeal. Nonetheless, Council is confident of its position. We will also undertake a review of other mining buffer lands within the Shire to ensure that it is genuinely being used for the purpose for which it is being rated".

Glencore declined to comment on the case.