It follows a decision by Ashton Coal, a subsidiary of the Chinese-owned mining company Yancoal, not to renew the planning approval for the contentious South East Open Cut project in April.

The $83 million project, 14 kilometres north-west of Singleton, would have produced about 2.4 million tonnes of thermal coal per annum and employed about 160 people.

The mining company said at the time that it had decided to direct its efforts towards a nearby underground mining project.

Yancoal confirmed on Monday that its subsidiary company White Mining would surrender the open cut licence to the government in the near future.

"Given that the South East Open Cut project is not proceeding, Yancoal will seek to surrender the mining lease in due course through the proper administrative processes," a spokesman said.

Local farmer and land holder Wendy Bowman fought a pitched battle against the open cut project over many years.

The NSW Court of Appeal ruled in 2015 that the mine could only proceed on condition that Ms Bowman agreed to sell her land to Yancoal.

Ms Bowman updated her will in 2018 to ensure her home could not be sold to the miner in the event of her death.

She said on Monday that was delighted to hear the final chapter in the saga was about to be written.

"It seems that common sense will prevail and they will hand back the licence," she said.

"When they were exploring this area years ago the man who was in charge of the project told me they had found very little coal in this area.

"My main concern all along has been the damage to the water systems. We have lost so much already and we can't afford to lose any more."

The state government is yet to indicate its intention for the mining licence, however, Ms Bowman and other locals want the state government to use a similar approach that was used to kill-off a number of so-called zombie gas licences.

As part of its 2021 Future of Gas Statement, the government extinguished dozens of licences across 55,000 square kilometres of the state's north west.

The move reduced the area of land available for gas exploration by 77 per cent.

Ashton Coal said its underground mine generated a total contribution of around $364 million to state and regional economies.

It employs a workforce of 327 (including contractors), and directly engages 468 supplier and service businesses. This activity indirectly supports a further 1,599 jobs that generate wages and salaries of $115 million.

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