Wambo Homestead, built in 1830, is on the path to possibly becoming the first protected property de-listed from the state heritage register under changes to the NSW Heritage Act, which came into effect in January, because the world's biggest private sector coal company wants to mine the seam under it.

Wambo Coal Pty Ltd, owned by the American giant Peabody and Japan's Sumiseki, has applied to the NSW Heritage Council for permission to demolish the homestead on the basis the company would suffer "undue financial hardship" if it must sacrifice coal to protect it.

As the state's Planning Department's heritage branch prepares a report to the NSW Heritage Council, residents and historians are horrified at the possible loss of the cluster of nine buildings, including three 1830s "old colonial Georgian" buildings displaying the earliest European architectural style used in Australia.

The Victorian Regency main house, whose timber Tuscan-inspired columns holding up the verandah roof remain elegant, if wobbly, and a grand entry to a central sandstone flagging hall, with fine, high windows overlooking valley and hills is still stylish.

"It is a test case of whether we are to be sacrificed to god coal," retired history teacher Carol Russell said.

The Heritage Council said six years ago: "Wambo Homestead is highly significant in the context of Australian pastoral activities and horse breeding in NSW."

It is "rare in NSW in that many outbuildings still remain substantially intact allowing easy understanding of the development of a homestead complex", it said.

Peabody Energy executives said it was not rare and initial research indicated that 78 other Hunter Valley homesteads were established before 1850 and had outbuildings.

Vacant for 10 years, Wambo homestead is not fit for habitation, has become increasingly isolated and will become more so as mining expands over the next 20 to 30 years, the company said in its application to the Heritage Council.

"Look at the cracks. It's just old, the poor thing," Peabody external affairs vice president Jennifer Morgans said during a tour of the main house.

The company has offered $3 million to help move three timber buildings to another site and pay for other ways of remembering the Wambo homestead, such as "virtual visits" online.

But Ron Fenwick, a member of the mine's consultative committee who wants Wambo restored on site, said: "You can't move it because it loses its identity."