"Their attitude was very cocky and it was as if they knew something that the council did not," Cr Graham said.

"Maybe they know something that I don't," he said, referring to the ongoing bid by Korean company Kores to gain state government approval to mine beneath the Yarramalong and Dooralong valleys and an area of state forest near Buttonderry.

The Wallarah 2 project general manager Kerry Heywood gave the council an updated briefing on its Wallarah 2 coal mining plans on Wednesday.

He said studies were under way to address issues raised by the Department of Planning and Infrastructure in preparing a new environmental impact statement as part of a fresh mining application.

Mr Heywood said the coal project was refused in March last year by the then Minister for Planning, but that refusal was not about the projected mining's impact on the Central Coast's water supply.

The department had agreed there was no threat to the water supply posed by the proposed longwall mining project, he said.

The mining operation would last for 40 years providing 1000 jobs.

And there would be no mining under Wyong Creek or the Mardi-Mangrove pipeline, Mr Heywood said.

But Cr Graham said the aquifers beneath the two valleys provided 53 per cent of the Central Coast's water supply and if they were destabilised and disappeared because of mining activity then the new $120 million Mardi-Mangrove Dam pipeline would be virtually useless.

"It would become a white elephant because there wouldn't be enough Wyong River water to pump to the Mangrove Creek Dam," he said.

Cr Graham said he was disappointed that NSW Premier Barry O'Farrell had not honoured an election promise to introduce special legislation to protect the shire's water catchment.

"Mr O'Farrell came to Wyong Shire wearing a 'Water Not Coal' shirt and said at Mardi he would squash the mining proposal forever and the Liberals went on to win the blue ribbon Labor Seat of Wyong," Cr Graham said.

"I'm frustrated that the premier has not honoured this promise and the project may now be reassessed by the government."

Cr Graham said the state government was cash-strapped and if the mine went ahead the government would gain about $1 billion in royalties.