International thoroughbred studs Coolmore and Darley have welcomed a recommendation the Drayton South coal mine should not be approved.

The proposed mine site in the Hunter Valley is on the doorstep of Sheikh Mohammed's Darley Stud and close to the Irish-owned Coolmore with both operations saying they would have to relocate if it went ahead.

The Planning Assessment Commission (PAC) on Friday said Coolmore and Darley should be given the highest level of protection and the mine plan proposed for the site should not be approved.

"Our entire industry welcomes this report," Dr Cameron Collins, president of the Hunter Valley Thoroughbred Breeders Association, said.

"Without Darley and Coolmore our critical industry cluster in the Hunter Valley would be at risk along with hundreds of jobs, our support and supply industries.

The recommendations in the report include:

* Darley and Coolmore should be recognised as essential to the broader Equine Critical Industry Cluster and given the highest level of protection from the impacts of mining

* the mine plan proposed for the site should not be approved.

Tom Magnier, head of Coolmore Australia, weclomed the commission's finding.

"We thank the PAC for taking the time to understand our industry, the considerable threats to our future, to our employees and to our globally recognised critical equine cluster posed by the Drayton South mine proposal," Magnier said.

Cameron said The PAC's report was an important first step in the process and laid the foundation that recognised the importance of Darley and Coolmore and the significant risks to the industry and environment posed by the mine.

"There are two more steps, as we understand it, to the process - Director General's Report and a final PAC determination," Collins said.

"We hope that these decision makers follow the PAC's lead, come to see for themselves how we operate and how important Coolmore and Darley are to our entire industry, and importantly, uphold and endorse the PAC's recommendations.

"We have always contended that this is one mine in the wrong place that has the potential to devastate an entire industry and that no amount of mitigation could avoid or reduce the significant adverse impacts of this mine."