Premier Chris Minns has thrown his support behind the Hunter Valley Operations expansion, arguing that the mining project is essential for the region's smooth transition to a clean energy future.
In a speech to mark the 140th anniversary of Business Hunter, Mr Minns also said that the state's natural gas resources should be used for the benefit of the domestic economy.
"HVO is very important for the state," Mr Minns said.
"The decision will be made really soon, but the government has made it clear with its coal statement that this is an integral, an intrinsic part of the NSW economy.
"It funds so much of the transition and change in our economy."
Likewise, Mr Minns said the state's gas exploration policy was designed to strengthen the manufacturing sector.
"We need to use it (gas) for NSW industry. We've taken heat for that, but it was the right decision."
But, as he defended continued reliance on fossil fuels, the premier also sought to distinguish the government's clean energy policies from those of the Coalition and One Nation.
Both parties have proposed unpicking or abolishing parts of the state's net zero road map.
Mr Minns said there was no turning back on the construction of the state's Renewable Energy Zones, including the Hunter-Central Coast REZ.
"We are transitioning from one source of energy to another and that is taking time and it's not cheap," he said.
"But to stop now, after investment has already gone into the system, we believe it would be ruinous for the economy and turn us backwards.
'All of the manufacturing companies, the people that employ people, the people that sweat on the next contract... I don't know how I would look them in the face and say to them 'Well, we're pulling out of our renewable energy zones and I can't tell you where energy will come from in the next five or 10 years' time."
Earlier in the day, Mr Minns visited the multimillion-dollar Gillieston Heights Public School redevelopment.
The school's new buildings will open day one of term one 2027.
In addition to 32 new modern classrooms it will have three support classrooms, a new library and hall with a canteen, new outdoor spaces, upgraded sports facilities and outside school hours care facilities.
The new permanent buildings will cater for more than 730 students.
It also includes a new public preschool with capacity for up to 120 children.
"This redevelopment of Gillieston Public School is not a nice to have, it's a must have for a fast-growing community," Mr Minns said.
"Under our government we've recognised that if you're going to have houses and new communities you have to have central infrastructure, whether it's hospitals, whether it's schools, whether it's new roads, and we're committed to putting money to where it's most needed and that is fast-growing suburbs and fast-growing communities.
"We know that it costs money but we don't see it as a drain on the budget, we see it as an investment in the future."
