The New South Wales Planning Assessment Commission has approved one of the biggest open-cut coal mines in the world in the state's north-east.

Whitehaven's Maules Creek Project, near the Leard State Forest, will extract 12 million tonnes of raw coal a year.

If given the final go ahead from the Federal Government, Whitehaven expects production to start mid-2013, with operations predicted to last around 30 years.

Managing director Tony Haggarty says stringent environmental conditions have been applied by the commission.

He says the mine will be good for the region economically and good for the state.

"It's one of the best coal developments in the world," he said.

"It's a large reserve, it's very good quality. It's the sort of coal that is in demand in the market place, and because the reserve is large and because it has a long life, there will be a significant area of land involved."

But Federal Environment Minister Tony Burke says the project will now face Commonwealth scrutiny.

It will examine the mine's potential impacts on the nearby critically endangered white box woodland.

An Environment Department spokeswoman says once the assessment is complete, it will go before Mr Burke who will consider the advice of the department, the Independent Expert Scientific Committee on possible water impacts, and any public comments.

Environmentalist Phil Spark says the planning commission's approval is a blow to the endangered trees and animals that live in the forest.

"My biggest concern is that the environment has been totally undervalued," he said.

"You just can't destroy a forest and think it's going to be compensated. It's an endangered ecological community and it just can't be replaced."

The Maules Creek Project is about 18 kilometres north of Boggabri in the Gunnedah Basin.