The town of Avoca is a pretty place, and it is pretty quiet.

Key points: The State Government's "exploration drilling grant initiative" matches dollar-for-dollar funding for mineral exploration

The State Government's "exploration drilling grant initiative" matches dollar-for-dollar funding for mineral exploration About 20 companies have been successful, including coal miners Junction Coal and Midland Energy

About 20 companies have been successful, including coal miners Junction Coal and Midland Energy Farmers say they are not given appropriate notice of exploration applications on their land

In Tasmania's Fingal Valley, Avoca was historically a mining town, but now there are only a couple of cafes and a pub, and the school is closing down because of low enrolment numbers.

Grant Jacobson's parents manage a cafe in Avoca, a town he says is often sleepy.

"Avoca used to be a big mining town, so it was good for the town at the time," he said.

"When there was plenty of mines the town used to be bustling with bakeries and butchers and a pub down the street there."

Grant Jacobson says he is not for or against coal mining, but Avoca needs a boost. ( ABC News: Jessica Moran )

Just down the road, in the Fingal Valley, there is still an operating coal mine.

Coal was discovered in the region in the 1800s, and Cornwall Coal still employs dozens of workers at its Fingal mine sites.

And now another company is hoping to find more of the resource.

Junction Coal was one of about 20 successful applicants for the State Government's "exploration drilling grant initiative", a scheme that matches dollar-for-dollar funding for mineral exploration.

Cornwall Coal Mine's washery facility. ( ABC TV )

The Queensland-based company has been granted $23,000 to look for coal in Avoca West, mostly on private land.

Perth-based Midland Energy is the only other company so far to receive a grant for coal exploration, with news of its $50,000 grant and plans to export 89 million tonnes of coal raising concern among farmers and environmentalists.

Junction Coal wants to explore areas that have previously been the site of coal mines, including the Stanhope mine, which still has heritage mining infrastructure on site.

The company has so far been doing desktop studies and accessing old maps, but no field work has been undertaken and no work plan has been approved.

Junction Coal's exploration licence covers some farmland as well.

Michelle McCartney believes coal mining is good for the region. ( ABC News: Jessica Moran )

Further down the valley in Fingal, business-owner Michelle McCartney said she would not like to see a new coal mine, but coal mining sustained employment for small towns.

"Whilst it isn't beneficial for the environment, it is the way of life here," she said.

'World is moving away from coal': Greens

Tasmanian Greens leader Cassy O'Connor said any new coal mine was bad news.

Cassy O'Connor says coal mining is "dead-end resource extraction" and the Government needs to focus on helping regional workers transition to new industries. ( ABC RN: Emma Lancaster )

"We respect that there are jobs right now in the Fingal Valley that are dependent on that longstanding coal mine, but we believe the Tasmanian Parliament needs to make a statement about the future, which is not in opening up new coal mines," Ms O'Connor said.

"The whole world is moving away from coal.

"Responsible governments are helping workers to transition — they're not continuing to invest in dead-end resource extraction."

More grants on the way

A third round of applications for exploration drilling grants closed in September and successful applicants will be announced in November.

The government grant for individual projects is capped at $50,000 for direct drilling costs, plus $20,000 if helicopter support is needed, with money provided after drilling is completed.

Applicants need to already have an exploration licence.

Cornwall Coal Mine's washery sits alongside rich farm land. ( ABC TV )

Agricultural consultant Jan Davis said the government grants were not an acceptable use of public funds.

"So on the one hand we've got the Government looking at handouts to the coal mining industry against farmers, and others in rural communities that have invested heavily of their own money to make a go of industries that are really important," she said.

Junction Coal, Midland Energy, Cornwall Coal and a company called HardRock Coal Mining currently hold coal exploration licences in Tasmania.

HardRock Investments was set up by Daniel Macri, the managing director of Midland Energy, but was later sold and, after being granted a mining lease, appointed receivers.

Farmers raise concerns

While Junction Coal's early plans are for pre-existing mine sites, Midland Energy's plans for the Woodbury and Jericho areas has raised the ire of some farmers, who believe land owners have few rights, and are often kept in the dark about exploration plans.

Farmer Brett Hall has experienced the shock of realising he did not own the resources below his land.

Tasmanian farmer Brett Hall was stunned to realise a company planned to dig for resources on his land. ( ABC News: Ellen Coulter )

In 2013, he found out Adelaide-based Petragas wanted to look for shale oil and gas across 4,000 square kilometres of the Southern Midlands, including his farm.

After seeing a public notice in the newspaper, he lodged a successful application to have his property excluded from the exploration licence.

"It was only that someone else told me there's this ad in the paper, and it was only 30 days to reply, and the number of people who read newspapers these days is getting less, so it's not a great means of communicating, and certainly none of the landowners were contacted," Mr Hall said.

Under the Mineral Resources Development Act, the director of mines needs to publish the intention to grant a licence in a local newspaper, so landowners can make objections within 28 days.

There is no requirement to individually notify affected owners or occupiers of private land.

Mr Hall, who is on the board of Farmers for Climate Action, said that was not acceptable.

"It'd be great if all the landowners were actually contacted and let know that this was being proposed on their land and not for them to hear second hand," Mr Hall said.

Farmers say it would be ludicrous to mine productive farm land. ( ABC News: Annah Fromberg )

The Tasmanian Government has a target of increasing new mining ventures by 50 per cent over five years, and also wants to grow the value of agriculture to $10 billion by 2050.

Mr Hall said there was a conflict between those policies when it came to coal on farmland.

"So there's a direct competition between the land use for that purpose, so yes there is some conflict with what we're trying to do with agriculture by going coal mining," he said.

"I think the Government does have a conflict of interest in that they grant the licence but then they also collect the royalties."

The Tasmanian Government has said while it encouraged mineral exploration, it did not support mining on productive agriculture land where it was not in the state's best interest and in conflict with a target to grow the value of agriculture.

In a statement, Resources Minister Guy Barnett said any proposal for mining would be subject to rigorous assessment and must be in the state's best interests.