Plans for the expansion of the Springvale underground coal mine will now be re-opened for submissions, with a public day of hearings set by the Planning Assessment Commission (PAC) for September 3.

A PAC review panel approved the extension in June despite concerns from the NSW Environment Protection Authority the mine had the potential to drain sensitive upland swamps and would release so much saline wastewater into the Coxs River that Sydney's main water storage could become 5-6 per cent more salty.

The demand for another review also comes just days after the Department of Planning had recommended the mine expansion proceed subject to certain discharge limits that would allow the mine to exceed Australian water quality standards indefinitely.

The review is the first ordered by Mr Stokes since he proposed an amendment to the State Environment Planning Policy (SEPP) that would bring economic priorities for mining projects back into line with environmental and social ones.

"A public review for the project will be held to ensure a fair opportunity for everyone to comment on the proposal," Mr Stokes said.

The mine, owned by Centennial Coal, is seeking to extend its 4.5 million-tonne annual production for another 13 years. It had begun laying off staff as its existing mining approval expires next month.

"I visited Springvale earlier this year and it was made clear to me at the time that there would be a gap between the expiry of the mine's approval and a decision about any new approval," Mr Stokes said.

Centennial Coal issued a statement to employees on Tuesday, with mine manager Jacques le Roux saying "it is disappointing and frustrating to learn" of the additional review.

Mr le Roux said the move would "add several weeks to the original planned timeframe", and called on staff to "actively express to government how the stand down and the delays in the approvals process is affecting you, your families and the community".

Priority reset

The SEPP amendment to rebalance priorities, which is yet to go before the cabinet for approval, has drawn criticism from the mining industry for putting jobs at risk during a downturn in the global coal industry. Supporters of the change, though, say the economic benefits are often exaggerated by proponents and should not be given excessive consideration.

Keith Muir, director of the Colong Foundation for Wilderness welcomed Mr Stokes's decision to order a new review: "[The move] is a clear indication that the environmental outcomes for this proposal must be significantly improved from where they now stand."

"The discharges of toxic mine effluent must be further cleaned up and all the 29 upland swamps on Newnes Plateau protected," Mr Muir said. "The slash and burn approach of Centennial Coal, the serial polluter and swamp wrecker, is not good enough."

Lithgow Mayor Maree Statham, though, described the latest delay as "ridiculous", and "disappointing", given last week's verdict by the Planning Department to recommend the extension proceed.

"It's like you win the lottery and then they say, 'give me back the ticket, I'll have another look'," Ms Statham said.

Ms Statham said thousands of jobs were at stake, not just the 300-plus employed at the mine before the recent stand-downs began. The mine is also the sole source of coal for EnergyAustralia's Mt Piper power station, which supplies about 15 per cent of NSW's electricity.

The mayor said the decision to review the plans would be another blow the region's economy.

"There are so many things against us at the moment," Ms Statham said. "It's huge ... it needs to be approved."

Fairfax Media also sought comment from EnergyAustralia.