The Independent Planning Commission was taking testimony on whether the expansion should be approved, a move which South32 says would maintain 500 jobs.

Friday's hearings featured scientists organised by the Environmental Defenders Office, speaking on the effects of mine subsidence on catchment creeks and swamps that feed the drinking water reservoirs.

University of NSW Professor Stuart Kahn said water quality would be adversely affected as surface cracking exposes new areas. He showed images of the damage to the Waratah Rivulet, once a major source for the Woronora Dam.

Read more: Stakes high as heavy hitters address planning commission

"I'll challenge anyone to maintain a straight face while suggesting this was evidence of a neutral or beneficial effect on water quality," he said. "WaterNSW has done their assessment [and] their conclusion is that it has not been adequately demonstrated that the project can have neutral or beneficial effects on water quality."

The "neutral or beneficial" test, in the NSW Mining State Environmental Planning Policy, was also raised by EDO lawyer Lauren Sims and Western Sydney University economist Neil Perry.

Hydrogeologist Peter Dupen, a former WaterNSW mining manager, said information gaps identified by the Independent Expert Panel for Mining in the Catchment in 2019 had not been addressed.

He said three of these were "deal-breakers" - how much water did the Government consider acceptable to lose, how wide can longwalls be while maintaining a 200m depth of unfractured rock, and what was the appropriate level of compensation.

"Key information is inexplicably not being made available to the commissioners," he said.

South32 had agreed to pay $103 million to offset the loss of water volume.

Department of Planning, Industry and Environment representatives returned to answer questions. DPIE consultant Howard Reed was asked why the proposed approval contained less strict consequences if conditions weren't complied with.

He said failing "performance measures" would lead "either to remediation or further offsets" (payments).

"The performance measures are not simply what the company put forward, we've toughened up the performance measures in three respects that I can think of.

"There's not greater than negligible impacts on the Avon River and the Cordeaux River, that was tougher than the company proposed.

"Secondly, proposed remediation for impacts on the water courses, and thirdly that the company [improve plans] to remediate stream features where practicable ...

"They're not simply what was in the EIS [South32's Environmental Impact Statement]. But where we thought the EIS had hit the right target, then yes we reflected the EIS as being the appropriate standard. It's a fairly standard practice at the department to reflect what's in the EIS."

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