The south Mandalong exploration area is near Morisset and adjacent to Wyee, extending south to Warnervale on the Central Coast.

Wyong councillor Sue Wynn said the mine plan was "just as worrying" as the adjoining Wallarah 2 underground mine plan in Wyong Shire, which the former Labor government rejected shortly before the March election.

"The planned south Mandalong mine is massive and it's flying well under the radar," Ms Wynn said. "This is coming at a time when the world is saying we really need to cut our emissions."

Centennial spokeswoman Katie Brassil said the exploration area was planned as an extension of the Mandalong mine, which employs more than 320 people.

The south Mandalong plan would duplicate the Mandalong mine, Centennial's biggest operation in Lake Macquarie.

"For us it's a natural progression of the Mandalong mine, which has been successfully mined since 2005," Ms Brassil said.

"We've had an exploration licence down there for years and it's not a new mine, we're following the coal seam."

She said the south Mandalong mine, if approved, would have the "same pit-top, drift and workforce" as Mandalong mine.

Centennial plans to lodge an application with state authorities for mining, after exploration is complete.

Ms Wynn said the mine was planned in an area that could be used for agriculture and housing.

"The previous government banned any development west of the F3 freeway and that's because they wanted the coal royalties for the land," she said.

"They were happy for that land to subside, but we need to protect prime agricultural land and make sure we have development in appropriate areas.

"Some areas west of the freeway are better to develop than the east side, with its wetlands and endangered ecological communities and aquifers."

Ms Wynn said Wyong Shire Council was concerned that Centennial planned to explore beneath Buttonderry tip, near Warnervale.

"We already know leaching from tips is catastrophic to our environment," she said.

She feared the mine would affect the Central Coast's water supply.