The state government has been accused of ignoring the advice of its own agencies in allowing the expansion of underground coalmining into Sydney and the Illawarra's protected water catchment area.
The Planning and Environment Department has approved the second stage expansion of Metropolitan Colliery's coalmine at Helensburgh, which includes mining under the Dam Safety Committee notification area for Woronora Reservoir.
The approval was given despite rejection of the mine's water management plan by the Sydney Catchment Authority (SCA) - which last year made clear its opposition to coal and coal seam gas operations within the notification areas for the reservoirs supplying water to Sydney and the Illawarra.
The SCA also sought legal advice on the possibility of having notification areas legislated as exclusion zones, according to documents obtained under freedom of information law. In objecting to the new mining, the authority wrote to the mining company asking it to alter its longwall layout - which Metropolitan declined.
The Department of Planning also rejected the method recommended by the Office of Environment and Heritage to monitor the health of upland swamps. The swamps make an important contribution to the quality and quantity of water entering the reservoirs.
"Planning's lack of support for the SCA is remarkable and inconsistent with the need for caution in assessing proposals to mine in Sydney's drinking water catchment," said Peter Turner of the National Parks Association and a member of the Metropolitan Colliery's community consultative committee.
A Planning spokeswoman said the department had taken into account comments from the SCA and Office of Environment and Heritage in giving its approval in April.
"The department fully considered that advice and requested that Peabody [Energy] address the issues raised and amend the draft plan where appropriate," she said. "The department only approved the final plan once they had been addressed in the final plan."
Metropolitan, owned by US giant Peabody Energy, is the oldest operating underground coalmine in Australia.
The mine secured initial approval in 2009 to excavate under Woronora Reservoir, although the company is yet to submit excavation plans for those longwalls.
A study released last month by NSW Chief Scientist Mary O'Kane into the cumulative impacts of activities in the Sydney water catchment found assessing the effects "with quantitative precision is impossible".
While the report found no reason to stop longwall coalmining immediately - given "the current cautionary approach" taken by agencies - it said such operations were likely to have more impact than coal seam gas mining.