The Chinese-owned company narrowly met a June deadline to apply for a mining licence for the billion dollar mine last year.

The project was required to reach "production stage" by 2020 by a cancellation clause in its 2018 exploration licence.

But Deputy Premier John Barilaro told media this week it had asked for, and been granted, an extension on their first lease payment instalment.

He flagged that the recent war of words over trade with China and the international "environment" for mining had "changed" in the years since the project won approval.

The state government is involved in negotiations with the mine "to see what the future of that particular mining lease looks like," he said.

Asked if the government was keen for the coal project to get up and running to spur investment, he said the company, which is owned by the Chinese government, should "get on with it".

"They've got the mining lease, they should get on with it and they need to go to the next stage," he said.

"The first stage is they've got to pay the NSW government's installment of about $200 million to keep moving. That's on them.

"I'm more than happy to work with Shenhua, and anyone else in this state about driving jobs and growing the economy."

The $200 million extension will last "a few months" according to Mr Barilaro, who is also the state's Resources Minister.

IN OTHER NEWS:

Nea farmer, and Caroona Coal Action group president, Susan Lyle, said she "didn't know what to make" of the Deputy Premier's comments, but was hopeful the government was changing its view on the mine.

"We've been pushing for this project to be scrapped ever since it was first approved in 2008," she said.

The project's water, environmental and rehabilitation plans have yet to get signed off by the federal government.

If approved, the project is expected to deliver more than $1 billion to the Australian economy annually, as well as 600 jobs during construction and 450 operational jobs.

Shenhua has been contacted for comment.

The NSW state government paid $260 million to buy back half of Shenhua's exploration licence in 2018.