NSW Resources and Energy Minister Chris Hartcher announced yesterday the new restrictions for coal seam gas mining, as a 60-day moratorium on new exploration licences comes to an end tomorrow.

Hunter-based opponents of coal seam gas exploration and mining have cautiously welcomed the government's move to extend a moratorium on fracking until the end of the year.

The government also announced a ban yesterday on the use of toxic chemicals in coal seam gas mining.

"The extension of the moratorium is a good thing but their approach is a bit piecemeal," Wollombi-based Lock The Gate representative Sean Gough said.

"There are a whole range of issues related to this industry that have not been properly addressed."

The Environmental Defenders Office is representing the Barrington-Gloucester-Stroud Preservation Alliance in the first court challenge against the coal seam gas industry.

The case is seen as a test case for communities across the state opposed to the industry's expansion.

The government also yesterday introduced tougher restrictions on the use of groundwater, and new public consultation guidelines.

"We understand there needs to be a balance between agricultural land and mining and were determined to get that balance right," Mr Hartcher said.

"That is why we will require all new applications for mining or petroleum projects which have the potential to affect agricultural resources or industries to submit an Agriculture Impact Statement."

But Mr Gough said the requirement was not tough enough.

"There are major pollution issues related to the extraction and disposal of the chemicals that have been in the ground for thousands of years," he said. with AAP