Interested parties will be invited to register during the course of a formal transaction process.

In the meantime an investigation is under way into finding an alternative source of coal to meet contractual arrangements between the undeveloped mine and its customers, three power stations in the Upper Hunter and on the Central Coast.

Feedback is expected by the government before the end of this financial year.

NSW Treasurer Mike Baird has provided an update on the project that's facing a $1.5 billion hurdle.

Expert advice to the Liberal- National government is that it would cost taxpayers that much to build and operate the mine under contracts authorised by the former Labor government.

The proposed mine is reported to be contracted to supply the power stations high volumes of coal at low prices by the start of the 2015/2016 financial year.

On November 14, 2012, the state government released the advice and committed to minimising the "significant risks and massive liabilities" created when its predecessor invested in the project.

It announced its intention to sell or lease the planned Cobbora mine, and proceed with the sale of state-owned electricity generators.

At a public meeting in Dubbo on November 28, Mr Baird was insistent that the mine would play a part in future coal supply and energy security in the state.

"It's not the mine, it's the contracts that sit above it and that's what we need to work through," he said.

This month he reiterated the government would not renege on the contracts.

"Preparations for the mine development remain on track so that the government can satisfy its obligations under existing coal supply agreements, unless and until a superior alternative is established," Mr Baird said on Friday.

"The planning and approvals process is under way with development approval expected by the middle of the year. A sale or lease strategy will be finalised for Cobbora at the conclusion of the planning approvals process."