Currently being investigated by ICAC, the licences are suspected of being allocated as part of a ‘criminal conspiracy’ set up to benefit former Labor powerbroker Eddie Obeid, members of his family, Macdonald and a number of other front companies and investors.
The allegations together with O’Farrell’s announcement yesterday that the Mt Penny tenement would be put to a public interest test has left Bylong locals unsure of the role mining will play in their region.
The Premier made the announcement yesterday after seeking advice from the ICAC Commissioner David Ipp.
The ABC reported that Bylong Valley Protection Alliance spokesman Craig Shaw said the future of the exploration licence is still up in the air.
"I don't want to sound underwhelmed or unappreciative here, this is good news that the government has taken on board a wider scope for considering public interest," he said.
"What we're saying is, please give us the detail about the rest of it, because it seems kind of only half worked out at the moment."
Shaw explained he is concerned the tenement will remain on the government's books if the licence is not cancelled.
"What happens if they say, 'Sorry Cascade, you can't have it', but this tenement itself, if it is the case that it was created under some kind of corruption or questionable circumstances, what happens to it?
"You know, is it just going to stay on the books, does it get let out to somebody else?
"I don't know, and it would have been nice to get a bow put around things, as far as it could have been.
"It just feels like it hasn't been tied up at the moment."
Communities in the state’s Upper Hunter have reported they are already feeling the full force of coal expansion.
Currently ICAC is also investigating the former Labor government's decision to grant the Yarrawa exploration licence near Denman.
The Northern Wollemi Communities Association spokesman Rowan Smith said they will be briefed on the current state of the mining plans at a meeting tomorrow.
He said the small communities would not survive if the Ferndale mine proceeds.
"Residents down in Baerami are getting coal dust in their water and those mines locally that are going to be at Ferndale, Yarrawa area haven't even begun operations," he said.
"That's the sort of impact.
"That's why people are in these areas to get away from that sort of an industrial situation, but it's coming to our doorstep."
Smith added that locals have already reported an increase of coal dust, and he worries things could get worse.
"It's going to be quite a big mine, I mean it's far bigger (the potential for coal there,) than Mangoola.
"It might be three times plus the size in terms of coal reserves.
"So the impact it's going to have is going to be very big, and right now it's just a quiet community.
"You just can't envisage what it's going to be."
Last month Australian Mining spoke to concerned Hunter Valley resident Graham Roberts who conceded it was going to be extremely difficult to find middle ground between agriculture, residents, and the mining sector.
“It’s a hard one, the mining is short term, in comparison to agriculture,” he said.
“A mine may have a lifespan of fifty years, agriculture has to be sustained longer then that.”
Roberts’ property is located over the hills from Xstrata's Mangoola coal mine, when asked about the mine’s proposed expansion Roberts was wary.
“At the moment mines seem to be all powerful, there needs to be very stringent conditions.”
“The valley at the moment looks like a moonscape.”
“I’m all for jobs and sustained development but not at any cost.”
In his forty years living in the Hunter Valley Roberts has noticed environmental changes in the area including increased amounts of dust and acidity in the air.
He attributes this to the Wybong coal mine and the power stations.