A miner living 12km from the Maules Creek Mine, near Boggabri, said the "terrifying" explosion was bigger than anything she had experienced in her 17-year career.
Another local told the NSW Land and Environment Court her lounge chair rocked during the blast on August 20, 2020 and she wondered if it was an earthquake.
Two workers at the adjacent Boggabri coal mine were taken to hospital for checks after the incident, with one saying the "almighty pop" left him with tinnitus and severe sleep problems in the months afterwards.
Maules Creek Coal, owned by Whitehaven, was on Friday found guilty of breaching conditions of its environment protection licence, including two charges related to noise and overloading of explosives.
Justice Sarah Pritchard said prosecutors for the NSW Environment Protection Authority proved the company did not carry out its activities competently.
The mine used more than 896,000kg of explosives across 1197 holes when modelling designs had called for about 850,000kg, the judge found.
The court was told the mine's management wanted to adjust blasting operations in late 2019 because there were problems with adequate fragmentation, or the break down of rock.
Poor fragmentation can lead to back and neck injuries when large rocks are dug up and loaded into trucks.
Management called in a blasting consultant who suggested various adjustments to the explosions, though he was not asked to consider the effect on neighbouring properties.
A shotfirer in charge of preparing the blast told the court there were "alarm bells" in his head in the lead-up.
"There was a lot of holes going off really close together which, when we're trained, that's not what we're trained to do," the shotfirer told the court.
An engineering expert who testified for the mining company, Catherine Aimone-Martin, said the adjustments were appropriate to improve fragmentation and safety at the mine.
"The emission of noise from blasting is normal and expected, and noise in and of itself is not an indication of improper dealing with explosives," Dr Aimone-Martin's written report said.
But an expert for the environment authority said the blast was not designed properly as the effects on workers at two nearby coal mines were not considered.
The judge said she accepted the evidence of residents and workers about the explosion, despite the company's attempts to "undermine" their credibility because one local was a vocal opponent of the mine.
"I find that it was not an ordinary blast," Justice Pritchard said.
A sentence hearing on the four charges will be held in late October.
The decision comes nearly four months after the Maules Creek Community Council lost a separate case for greater protections against pollutants emitted by the mine.
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