His comments follow a report revealing iron concentrations in a rivulet feeding the Woronora Reservoir have doubled since the expansion of the mine to levels that exceed Australian drinking water guidelines by 30 per cent.

“These concerns are worth having a look at, it’s important any mining company complies with legislative requirements and if the company hasn’t done that then communities have a right to be concerned,” he said.

“Mining plays an important role in our region, it’s been a difficult year for mining, but… it’s equally important mining operators do so in accordance with government legislation.”

Doctor Peter Turner, the National Parks Association-nominated committee member who reviewed the mine’s 2012 annual report was the first to raise concerns about the level of iron, and has called on the State Government to halt operations.

“The mine expansion approval conditions clearly state that there should be no more than a negligible reduction in water quality and quantity,” he said.

However, mine owner US giant Peabody Energy denied that the Helensburgh mine had breached approval conditions. 

"No performance measures have been exceeded and iron concentrations in Waratah Rivulet are below project approval requirements," a spokeswoman said.

"Metropolitan Coal takes its environmental responsibilities seriously and we maintain a strong history of compliance."

Dr Turner also highlighted an attempt by the mine to shift the baseline period used to gauge water quality from May 2010 to the next phase of longwall operations due to start early next year.

"The change would mean the contamination increase caused by the first phase of the mine expansion when the water quality had already been compromised would become the new normal," Dr Turner said.

"It’s not what you’d expect from a major multinational mining company," he said.

The Peabody spokeswoman said the baseline change was "to ensure consolidation of reporting". A spokesman for the Department of Planning and Infrastructure, which set the mine’s conditions, said Peabody had been told its bid to alter the baseline was "inappropriate".

The department will consider all "relevant information" before finalising its review of the mine’s draft plan to extend its longwall operations, the spokesman said.

It also noted the company had commissioned a peer review of the reported breaches and was also preparing its 2013 annual review. Longwall mining involves giant machines that shear coal from the seam causing the rock above to collapse behind the machine as it moves forward.

Dr Turner said contamination of surface waters by mining was commonplace in Sydney’s drinking water catchment.

Coal extraction caused cracks in the bedrock of rivers and streams and water passing through these fractures leached out minerals into streams and reservoirs.

"Once these so-called iron springs are started, they can take decades to stop," Dr Turner said.