The Baird government will restore a balance between economic and environmental considerations for major mining projects in a move that has cheered communities such as Bulga in the Hunter but sparked alarm within the industry.
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Planning Minister Rob Stokes will release on Tuesday a proposed amendment to the Mining State Environmental Planning Policy (SEPP), removing a provision that made the significance of the resource "the principal consideration" when determining projects.
Mr Stokes said the draft amendment reflects a requirement for law makers to consider the likely environmental, social and economic impacts of any mining development.
"The careful deliberation of environmental, economic and social issues is fundamental to good planning," Mr Stokes said.
"This proposed amendment reflects the importance of balance in assessing the likely impacts of mining developments."
The move means that the Planning Assessment Commission will need to consider the rebalancing proposal for projects currently being reviewed, including the controversial Rio Tinto Warkworth open-cut coal mine expansion near the hamlet of Bulga.
"It's very good news," John Krey, vice-president of the Bulga Milbrodale Progress Association.
"There's a good chance the PAC will reject the Rio mine."
The NSW Minerals Council, however, warned that any changes to the SEPP would hurt local economies.
"We will be seeking urgent legal advice on the implications of the proposed change, but from what we have seen it does appear to be a retrograde step that will cost jobs in regional NSW," Stephen Galilee, chief executive of the council, said.
Sue Higginson, principal solicitor for the Environmental Defenders Office, said that while details of the amendment are yet to be made public, Mr Stokes appeared keen to return the SEPP to where it was before 2013 when the previous Premier Barry O'Farrell ensured "a tonne of weight" be given to economic considerations.
"We do see this as placing some balance back into the planning process," Ms Higginson said.
Apart from the Warkworth verdict before the PAC, the future of other mine projects could now face greater scrutiny.
These include the underground coal mines planned by Centennial Coal for its Mandalong and Springvale expansions. If a court case against Shenhua's Watermark coal mine on the Liverpool Plains halts that venture, it too may be reviewed under a revised SEPP.
"And it will have an impact on any new mines," Ms Higginson said.
Bulga, though, was both the trigger for the 2013 amendment to the SEPP and may be the first project affected by the latest changes.
The Land and Environment Court in April 2013 overturned an earlier approval for Rio Tinto's Mount Thorley Warkworth mine, citing the mine's impact on the environment and local community, following a legal challenge from the Bulga-Milbrodale Progress Association.
Justice Brian Preston, chief judge of the Land and Environment Court, said the association's appeal should be upheld due to "the significant, diverse biological adversity, noise and dust and social impacts of the project".
The impacts "would exacerbate the sense of loss of place, and materially and adversely change the sense of community of the residents of Bulga and the surrounding countryside", he said.
Rio Tinto subsequently lost an appeal a year later in the Supreme Court.
The miner resubmitted its proposal. As Fairfax Media reported, a document released under freedom of information showed the company began lobbying the government directly after its 2013 court loss to have the SEPP changed.
