The L and M Group has exploration permits for the 98sq km Hawkdun lignite deposit near St Bathans but has not decided whether to apply for a mining permit.
Details of the potential mining operation emerged last week during a business forum in Alexandra.
Approached by the Otago Daily Times yesterday for comment about the possibility of a 25-year lignite-mining operation in the upper Manuherikia Valley, the chairman of the Central Otago Environmental Society, Richard Kohler, said the group would be keeping a close watch on the plans.
"Given that it's in a sensitive landscape, next to the [Oteake] Conservation Park, we're very likely to discuss it and make a submission should the company decide to apply for a mining permit.
"We would certainly look into it from a landscape and sustainability point of view, taking the whole area into account."
Coal deposits in the district had been extensively mined in the past, Dr Kohler said.
However, he said any development of the Hawkdun deposit would require a "massive outlay".
"I think it would only work if you went in there big style and it would be viable only if petrol and oil prices went up."
Although the L and M Group had a good history in Central Otago, based on the gold mining projects they were involved in, it was important to take each potential mining operation on a case-by-case basis, he said.
