The project, 24 kilometres north-west of Singleton, would involve mining on ecologically fragile alluvial river flats.

Hunter Valley land and water users have warned of potentially disastrous environmental consequences if the project is approved.

It was previously being assessed under the former Labor government's controversial 3A planning laws.

Aquifer interference regulation is a key component of the Coalition's stated reforms to the planning and assessment process.

"The regulation will provide clear guidance on the acceptability of impacts on aquifers to ensure our water resources are protected for current and future generations," the policy states.

The NSW Office of Water has acknowledged the project could reduce reliable access to other water users in the area.

"The proposal will inevitably result in some inflows from surrounding water sources into the void created by the mining pit," the office's submission to the NSW Department of Planning says.

The submission also highlights the possibility of saline ground water mixing with alluvial water.

"The information provided shows that there is some increased risk of mixing the highly saline deep groundwater with the relatively less saline alluvial groundwater as a result of depressurisation of the alluvial aquifer," it says.

Coal & Allied has said it could show that similar projects had been successfully rehabilitated to productive agricultural land after mining operations.

A Department of Planning spokesman said the department was assessing the proposal based on all relevant information received from the proponent and those who had made submissions.

"However, due to the project's location, the department has requested additional information from the proponent regarding the project's impact on productive agricultural land and whether the site can be satisfactorily rehabilitated once the project is complete," the spokesman said.