Environment Minister Greg Hunt this week gave the provisional go-ahead to the $1.2 billion dollar project, around 400 kilometres north-west of Sydney.
It will be run by Chinese state-owned company Shenhua.
Agriculture minister Barnaby Joyce has openly expressed his opposition to the project, saying he'll continue to fight against the mine.
While the federal government has approved the mine, that does not guarantee it will go ahead.
Shenhua still needs a mining license from New South Wales, which means the final approval rests with the state government.
Agriculture Minister, and local member for the area, Barnaby Joyce, wants New South Wales Premier Mike Baird to put a stop to the project.
"I've never agreed with this mine from the start. I've been quite open about that. I think everything I've said on the public record is that I don't agree with it and I will continue on with that and we've written to the Premier now because the final part of this, because mining assets are assets of the state and the approval process is overwhelming one of the the state and and the revenues, royalties go back to the state, this process now goes back to the state and it hasn't finalised yet."
Prime Minister Tony Abbott says he respects Mr Joyce's views.
"I really do respect his passion and commitment, both as a local member and as a minister, but as he himself has pointed out, the federal Environment Minister's approval is step 15 in a 17-step process. So far there are 14 steps that were outside of the remit of the Commonwealth Government and one step that is, and there is a couple more steps to go. So let's see what happens from here."
The state government's final approval for the mine is also subject to proceedings in the Land and Environment Court.
A local Landcare Group has lodged a legal challenge, centred on the impact of the project on the koala population.
Liverpool Plains Upper Mooki Landcare Group says if the coal mine goes ahead, 847 hectares of koala habitat will be cleared over three decades.
There are also concerns about the impact on the farming area's water resources.
The federal government has put strict conditions on the mine, including restricting the area to elevated areas around Mt Watermark and making the nearby black soil plains off limits.
But former New England M-P, Independent Tony Windsor, isn't satisfied.
He's considering making a political comeback to help fight againts the project.
And Mr Windsor is accusing Barnaby Joyce of being insincere in his opposition to the mine.
"He's been right in the middle of this, with the chinese free trade arrangements. There are a lot of factors in this, because it's a Chinese government owned mine, the free trade arrangements that have been going on. There's all of those background noises. So quite obviously he's got to be seen to be just outraged by all of this. "I've tried, I've done my best". Well he hasn't done his best."
The project would extract 10 million tonnes of coal a year for 30 years.
In February the federal government referred the proposal for independent scientific analysis of its effect on groundwater.
Three months later the Independent Expert Scientific Committee monitoring coal mining reported a lack of information on how the mine would address water supplies.
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