The assembly government says coal is a sustainable supply of energy
Coal mines will have to be built more than 500m (1,640ft) away from homes in the future according to new planning advice from the assembly government.
Environment Minister Jane Davidson said the buffer zone would create a coal industry that does not impact so much on people's health and environment.
The new advice will apply to both opencast and underground coal mines.
Recently the Ffos-y-Fran opencast mine in Merthyr Tydfil was allowed with parts just 40m (130ft) from homes.
But Ms Davidson added that in "exceptional circumstances" mines could still be built closer to communities if it is deemed the best way to "bring damaged land back to use".
She said: "Including a 500m buffer zone policy is a significant step towards our common goals - planning for a coal industry that works with local communities, that respects the environment and, for the immediate future, continues to contribute to a secure, diverse and sustainable supply of energy and of coke for the iron and steel industry."
She added the new advice to local planners would put a "high value on the well-being of the people who live and work in the Welsh coalfields, their health and every day amenity while at the same time recognising the value of our coal for energy, for steel, for employment and regeneration."
But the announcement has come too late for people living near the Ffos-y-Fran mine.
Campaigners against the scheme had called for a 500m as part of the development.
But the site was allowed to go ahead around 40m (130ft) from the nearest homes.
Residents campaigned against the Ffos-y-Fran mine
Paul Stookes, of Richard Buxton Solicitors, who represented the local community in their battle against the mine, said he felt residents would be angry the regulation was being brought in too late for them.
"The digging started on site about 16 months ago and it's as we expected there - a lot of noise and a lot of dust," he said.
"This is a case where a 500m buffer zone should have been brought in. That would have prevented so much dust [in people's homes] and noise.
"I suspect this won't have any impact on Ffos-y-Fran and I think residents will be seriously aggrieved and rightly so.
"We argued for a 500m buffer zone and were told they didn't need one. It's an absolute disgrace."
Terry Evans, who lives in the house nearest the site in Ffos-y-Fran, said: "It's good news for the rest of Wales and I'm pleased something has come out of our campaigning.
"But we have suffered for about two years. The dust is awful and the noise can be very annoying, you can hear it all the time and it can drive you cuckoo."
Elizabeth Condron, who lives 450m (1,485 ft) away, added: "I'm disgusted by the assembly. It's appalling up here and the noise can be heard until 10pm and you can write your name in the dust.
"But I don't think this new regulation would have made any difference for us as they seem to have get-out clauses for some areas like this one because there's a lot of old shafts here."
Friends of the Earth Cymru have welcomed the move but say it should have been introduced earlier to protect residents near developments like Ffos-y-Fran.
As well as the buffer zone, the assembly government is also introducing compulsory health impact assessments for open cast coal applications.