Environment Agency Wales has granted a permit change to allow Vale Europe Ltd to operate a power plant that uses waste to generate electricity.
This decision follows a thorough assessment by the Agency which found that the company would be able to operate the new facility without harming human health or the environment.
Before reaching its decision, the Agency addressed concerns raised by local people, and consulted with local businesses and other professional organisations.
The company currently operates a nickel refinery in Clydach and will expand to operate the new pyrolysis plant at the same location, which would produce gas from waste to fuel engines and generate electricity.
The revised permit will require the company to continue to meet the highest environmental standards it is already adhering to in order to protect local people and the environment.
Agency officers will now continue to enforce these strict operating conditions.
Steve Brown, from Environment Agency Wales said:
"We have scrutinised the application rigorously over the last few months including a full consultation on any possible health or environmental issues.
"Detailed information from the company shows they have the necessary plans in place to operate this plant to the highest environmental standards.
"Now that we have granted the permit, we will monitor operations at the facility closely to make sure the company continues to operate within the requirements of the permit."