Expansion of mining in the banded ironstone ranges of southern Western Australia has focussed attention on the genetic impacts of habitat loss on rare endemic taxa. One example is Tetratheca paynterae subsp. paynterae (Elaeocarpaceae), an insect-pollinated, perennial shrub confined to 4 ha of banded ironstone outcrops in the Windarling Range. Mining removed 1,900 of the 7,700 recorded plants in 2004. Further reductions could occur if it can be demonstrated that the viability of the remaining population is not threatened. To investigate the potential impact of reductions in population size due to mining we first used Bayesian clustering and principal coordinate analysis to define population boundaries based on differentiated gene pools. The level of genetic diversity and spatial genetic structuring was then compared among populations that ranged in size from 46 to 4400 individuals. Analysis with 11 microsatellite loci revealed lower genetic diversity in small populations (A R = 4.5–4.8) than a large population (A R = 6.3) together with significant pair-wise differences among populations separated by distances of 80 m or more. Spatial autocorrelation analysis showed the extent of spatial genetic structure differed among populations of different size, consistent with near-neighbour mating and limited dispersal. Fine scale spatial structure was consistent with historically low gene flow. Analysis of the impact of possible expansions in mining revealed small, isolated populations of T. paynterae subsp. paynterae were of high conservation value. While their removal would reduce plant numbers and genetic diversity by less than 5%, unique genotypes will be lost resulting in a 30% decline in genetic differentiation.