Legislation giving the state government the power to cancel coal licences under scrutiny from the corruption watchdog has been met with relief by thoroughbred breeders.

NSW premier Barry O'Farrell introduced the legislation last week in the wake of the Independent Commission Against Corruption's findings former Labor minister Ian Macdonald acted corruptly in the case of the Doyles Creek licence.

Doyles Creek is close to international studs Coolmore and Darley which have been fighting the licences, saying they would have to move out of the Hunter Valley if more open cut mining went ahead.

"It makes a huge difference and makes us more comfortable," Darley managing director Henry Plumptre said.

"The legislation gives the government wide-ranging powers it didn't have before.

"The health aspects for both humans and horses from the coal dust in the air and the water courses have never been fully explored.

"The proposed mines are very close to us."

ICAC has said it will make recommendations to the state government in relation to what action it should take on the licences by the end of the year.

The Hunter Valley is acknowledged as the most important and successful thoroughbred nursery in the country, producing 50 per cent of the foals born in Australia.

Both Coolmore and Darley already have mines within a few kilometres of their doorsteps.

The Hunter Valley Breeders Association says its members are not anti-mining but they want to create a balance between the two industries.

The thoroughbred industry in the Hunter Valley contributes more than $2.5 billion annually to the state's economy and has the world's second largest concentration of stud farms behind Kentucky in the United States.

Coolmore, which runs studs in Ireland and the United States, is owned by John Magnier while Darley Australia is the southern hemisphere branch of Dubai ruler Sheikh Mohammed's global thoroughrbed interests.