A study of coal resources in the Upper Hunter Valley, which will guide government decision-making in approving any applications for coal mines in the area, confirmed there was limited potential for coal mining in the region, planning minister Frank Sartor said on Tuesday.

The report assessed the opportunities and constraints of coal mining in the area, taking into account surface and ground water resources, natural and cultural heritage values, and existing land uses.

Sartor said the investigation found that less than 7% of the 5000 square kilometre area had exploration or resource potential. The only underground mine that currently extends into the Upper Hunter is Anglo Coal's Dartbrook operation, 140km north-west of Newcastle.

“This study has identified just two sites which are suitable for opencut mining over the next 15 years (subject to further detailed assessment) at Bickham and Castle Rock,” Sartor said.

“The strategic assessment rules out any potential for underground mining during this period.”

The report found the Pages River, adjacent to the Bickham site south-east of Murrurundi, should be protected from any significant impact from coal mining.

The report was met with criticism from Greens MP Lee Rhiannon who accused the NSW State Government of attempting to “bury the report that throws into doubt the development of new coal mines in the Upper Hunter”

"The Government's latest Strategic Assessment of Coal Mining in the Upper Hunter warns that new coal mines in that region would threaten the health of the Pages River and none should be approved until the river and its catchment are 'fully protected'," Rhiannon said.

“It is time that the Government did the right thing by everyone including the coal companies and announced that there can be no new mines in this area.”

The Bickham mine has also been met with opposition by the Bickham Coal Mine Action Group – its objections centre around any potential damage to the Pages River and the mine’s water usage.

The report recommended permitting mine wastewater discharges only if quality was consistent with maintaining the river’s water quality, natural flow regimes and associated conservation values.

It recommended new coal mines within the Pages River Catchment undertake a full Water Resource Assessment and draft life-of-mine Water Management Plan as part of any development application, consult the community during its preparation, and have the results reviewed by an independent expert panel.

The study was prompted by the Bickham mine proposal and was exhibited for public comment in March 2005. It prompted 46 submissions, mostly from the local community, with a majority expressing support for the draft recommendations, Sartor said.

Bickham Coal Company plan to extract 25,000 tonnes of coal to a depth of 100m from the site.