Hume Coal's proposal for a 40-square-kilometre underground mine in the New South Wales Southern Highlands has the local community deeply divided.

The company, owned by the Korean steelmaker POSCO, is looking to produce 3 million tonnes of coal a year from seams up to 180 metres underground.

The $725 million proposal would see coal-handling facilities, stockpiles, a rail loop, railway lines and a conveyor belt constructed on some of the highlands' historic properties.

Hume Coal's project director Greig Duncan said the proposed mine was a "low-risk, low-impact underground coal mining project".

Mr Duncan said it would be barely visible to local residents.

"They won't see it — basically, the topography will hide the mine areas from the general public."

Hume Coal has already spent approximately $50 million acquiring seven properties, including Mereworth, near Berrima, for $11.1 million and Evandale at Sutton Forest for $12 million.

"In terms of timing, you're looking at approximately five years before construction could start," Mr Duncan told the ABC.

An environmental impact study is still to be completed and Hume Coal has been holding public meetings around the Southern Highlands to brief locals on the project.

At a recent forum in Moss Vale, Peter Martin from the Southern Highlands Coal Action Group accused Hume Coal of playing Russian roulette with residents when it came to water.

"What we're looking down is a drawdown on bores of hundreds of landowners in this district," he said.

"What we want to see is the evidence — [Hume Coal] won't give us their assumptions, they won't give us their water modelling, they won't give us any proper scientific evidence on any of the issues, be it dust, be it water, be it wind."

One pro-mine attendee was shouted down when he addressed the crowd.

"Your car, potentially your Range Rover, uses a lot of steel," he said.

"Ask yourself if you're a fair representation of the demographic of the community. You do not represent someone who lives in Moss Vale, who wants a job in a highly paid skilled area," he said, before leaving the auditorium.

Locals Jimmy Barnes, Leo Sayer oppose mine

It is a view that Lee Webb, from the United Mine Workers, a branch of the CFMEU, said a lot of locals shared.

"There is skilled labour in this district now that could work in a coal mine and they are moving outside and travelling outside the district to find work," he said.

"A mine in the area would significantly help the younger people get a job in this industry."

Mr Webb said the coal industry was going through a fairly large downturn at the moment, "but it is pleasing to see that someone is trying to get a coal mine going and offer employment".

But some high-profile locals are aghast at the prospect of a 24-hour-a-day, seven-day-a-week mine with a life span of up to 30 years.

Singer Leo Sayer, who moved to the Southern Highlands earlier this year, said: "We're on the precipice of something pretty horrific."

"This is all about making money for other countries; it's not coming back to Australians," Mr Sayer said.

Singer Jimmy Barnes has lived in the Southern Highlands for decades.

"I hope it won't go through and I'm going to do everything I can to stop it," he said.

The two giants of rock and pop in the 70s and 80s are considering performing at concerts to raise money to fight the world's fourth-largest steel producer's coal mining proposal.

Residents concerned about impact on groundwater

For 80-year-old Kathy Roche, the fight is deeply personal.

The retired pharmacist and her husband, John, a retired GP, are among five landowners fighting to keep Hume Coal from drilling on their land at Sutton Forest.

"This land has been the most wonderful thing in our lives apart from our family — it's been the most wonderful joy," Mrs Roche said.

Kathy and John Roche on their property at Sutton Forest. ( ABC News: Philippa McDonald )

"We're fighting it with all out might and we've got great support."

Mrs Roche is among many who have expressed concern to the ABC about the impact of underground mining activity on groundwater.

"We are sitting on one of the best aquifers in the whole of New South Wales," she said.

"Ultimately, when they do start mining, there will be much greater drainage of aquifers. Within 12 years we could ultimately have a dry aquifer."

Hume Coal's mine project director Mr Duncan told the ABC: "Where we've identified in advance there will be a reduction, we'll work with the landowner to provide an alternative water source, or deepen the bore or drill them another bore so they have water to continue on with their agricultural business."

Farmer Peter Brooks said mining and agriculture had co-existed for more than a century. He is leasing several of the properties that Hume Coal has bought in the district.

"It's just an awesome location," he said.

"We've got beautiful basalt soil, high rainfall — from a production point of view it's a really good set up."

He has already sown crops, is running cattle and is planning to fatten thousands of lambs for Christmas.

"[Hume Coal] wanted to show that mining and agriculture can co-exist together and I believe in that," he said.

"If I didn't I wouldn't be here."