The Federal Government has ordered an investigation into whether Aboriginal heritage and sacred sites have been overlooked in the conditional approval of Shenhua's proposed Watermark mine on the Liverpool Plains, in northern New South Wales.

The independent review is the latest in a series of challenges to the mine.

The mine gained approval from the Federal Government in 2015 but has not yet applied for a mining licence, and Deputy Prime Minister Barnaby Joyce has raised doubt about the project's future.

There has been speculation the mine will not go ahead.

The Gomeroi Traditional Custodians have been fighting to have a number of cultural sites within the proposed mine's boundary protected.

They have lodged an application with the Federal Environment Minister seeking the review, under Section 10 of the Aboriginal and Torres Strait Islander Heritage Protection Act.

The group has asked the Environment Minister to protect five areas: Watermark Mountain and landscape viewing corridors from the summit looking towards culturally significant areas, and the areas themselves — two grinding groove complexes and two culturally-modified trees.

The group said the sites were important because they "retain immeasurable historic, social and cultural value to Gomeroi People", and claimed the large scale open cut coal mining project would irreversibly desecrate or destroy them.

The group also said the area was significant for its connection to country, the continued use of the area as a medicinal plant and bush tucker gathering area, and the importance of the site for maintaining distinctive Gomeroi and Aboriginal culture and spirituality.

Barrister to examine extent of area to be protected

Sydney barrister Susan Phillips has been appointed to conduct the investigation, and is taking written submissions until October 11.

She will prepare a report for the Minister outlining issues such as the significance of the area, the nature and extent of potential desecration, and the extent of area that should be protected.

The Minister will then decide whether to make a declaration to preserve and protect the specified areas.

The Department of Environment and Energy: application is 'last resort' protection

The Department of Environment and Energy said no failings were identified in the New South Wales approval of the mine in relation to Aboriginal heritage, and remained a state matter until the heritage was considered to be of national significance.

In a written response, the department said while the mine was granted conditional approval under the Environment Protection and Biodiversity Conservation Act (EPBC Act), the ATSIHP Act is a separate piece of legislation, which is triggered when an application is made, under section 10, for "last resort" protection.

Windsor: review could stop mine

The former independent member for New England Tony Windsor said the review could stop the proposed Shenhua coal mine.

Mr Windsor said if the report found the sacred sites needed protection, it could pave the way to stop the project.

"I've got no doubt the mine will never proceed and in fact the company doesn't want it to proceed now and is looking for a way out," he said.

"This may well provide one of the initiatives for the company to remove itself from the landscape."

But Mr Windsor said ultimately it lay with the Federal Environment Minister Josh Frydenberg.

"Even though it's a independent process, the minister always has the final say in determining these things," he said.

"I hope we don't see that with Josh Frydenberg coming up with a determination saying 'Oh, we've had a good look at this. Everything's ok. Nothing to look at here. Move on, move on. Let's get on with the mining activity'." he said.

The ABC has contacted both the Minister and Shenhua for comment.