Wollongong Coal says its new plan for its Russell Vale mine would reduce the amount of coal mined, the damage to the surface, and the number of people employed.
In a bid to win approval for its expansion beneath the drinking water catchment, the miner has submitted a revised proposal which drops the amount of coal to be mined from 5 million tonnes to 3.7 million, at the rate of 1MT per year.
It would use only a "non caving" first workings mining technique, and would not mine underneath the "full supply level" of the Cataract Reservoir.
There is simply too much at stake with mining in this sensitive location.
Under the reduced scope about 205 jobs would be required to work the mine, compared with 300 under the previous plan.
Wollongong Coal said it would have "negligible" impact on the surface.
"The revised mine plan has been designed to be long term stable with negligible risk of pillar failure to address potential subsidence-related mining impacts on groundwater, surface water and biodiversity within the Cataract Reservoir catchment," its consultant Umwelt said in the new proposal.
Operating hours would also be reduced to limit the noise from the pit top, while a coal processing plant would be constructed.
The proposal is confined to the "Wonga East" section of the ore, which is the part of the lease to the east of the Cataract Reservoir.
Wollongong Coal was responding to the Planning Assessment Commission which said the application lacked sufficient information about the risk of significant impacts on the water catchment and the suburb below.
Anti-coal group Lock The Gate was glad for the reduced impact but said the miner's environmental and safety record should rule it out.
"The new plan still proposes to mine underneath seams that have already been mined with longwall machines," the group's NSW co-ordinator Georgina Woods said.
"The company has very little money and is still under investigation as to whether it is a 'fit and proper person' to mine in NSW.
"We are calling for the NSW Government to complete its 'fit and proper' investigation before it even considers this latest proposal, given the fact the revised proposal will be conducted entirely within the 1.5km 'dam safety notification area' for Cataract Reservoir.
"There is simply too much at stake with mining in this sensitive location."
"First workings" mining involves a series of roadways or tunnels driven into the coal seam. The coal left behind forms a grid of pillars between the roadways which hold the roof strata above.
Wollongong Coal told the Australian Securities Exchange the environmental reports in the new submission had been "independently peer reviewed".