Agriculture Minister Barnaby Joyce says "the world has gone mad" after his own government approved the highly contentious Shenhua Watermark coal mine in his NSW electorate, despite his vehement protests.

Environment Minister Greg Hunt on Wednesday conditionally approved the $1.2 billion project, putting him at odds with his Nationals colleague who has previously decried the proposal by the Chinese government-owned firm as "an absurdity".

Agriculture minister Barnaby Joyce has lashed out over a coal mine approval. Credit:Andrew Meares

"I've never supported the Shenhua mine. I think it is ridiculous that you would have a major mine in the midst of Australia's best agricultural land," Mr Joyce said in a statement posted on his official Facebook page on Wednesday.