About a decade ago, when the first mining exploration licences were being readied for the rich farmlands of the Liverpool Plains, former independent MP Tony Windsor warned the move would backfire on the industry.

"They're in the wrong place," Mr Windsor recalls saying. "Out of this will come closer scrutiny for all mines."

Mr Windsor's comment may prove prophetic. The federal government this week approved the 10 million-tonne-a-year Shenhua open-cut coal mine at the Liverpool Plains site of Watermark near Gunnedah, sparking a media frenzy.

Although the mining industry cheered the approval, the state government is yet to grant a mining licence for the $1.7 billion venture.

This week, the Baird government also signalled a more balanced approach to the industry, proposing to amend the State Environmental Planning Policy to remove the "principle consideration" given to the economic significance of the resource in question.

Stephen Galilee, the head of the NSW Minerals Council, fears the proposed change "will remove a critical component designed to protect jobs".

Environment groups leapt on the first sign the change may have an impact, highlighting a letter sent out by the Planning Assessment Commission on Thursday.

The commission said the amendment "is a relevant consideration" in its determination of Rio Tinto's planned expansion of the Warkworth mine near Bulga, and it would now accept additional submissions until the end of July.

A senior government source, however, raised doubts the planning policy  change would make a major difference to the outcome of Rio's proposal. It may also not have a big influence on the fate of the Shenhua mine, although water issues may prove "the spanner in the works" for that project, the source said.

Shadow Minister for Resources and Energy Adam Searle said the Shenhua mine must not damage farmland in the Liverpool Plains.

"In light of the Baird government's recent changes to mining approvals, the Watermark mine should be subject to the new [State Environmental Planning Policy] framework that looks at environmental and social, not just economic, impacts," he said.