Rio Tinto is accused of threatening the New South Wales Government with mass job losses unless its given the green light to expand an Upper Hunter mine.

The New South Wales Planning Assessment Commission (PAC) is currently assessing Rio Tinto subsidiary Coal and Allied's latest request to modify its Warkworth coal mine.

Its previous expansion was rejected by the New South Wales Land and Environment Court.

Under new laws, introduced late last year by former Resources Minister Chris Hartcher, the PAC must ensure the significance of the resource is considered in the decision-making process as an important factor.

Critics argue this comes at the expense of social and environmental factors.

The mining giant says if it does not expand production will drop and the mine will be unviable, risking the employment of more than 1,300 workers.

Opponents claim the mine has provided no economic data supporting this claim, and the government has failed to ask them to.

During the PAC's hearings last month, the company was given a challenge by Australia Institute economist Rod Campbell.

He said that "It's hard to understand as an economist why the entire workforce is at threat from a minor modification.

"The company added that it needs access to an additional 350 metres of forest offset, it had previously agreed not to mine, in order to maintain production levels.

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