Workers at the Tahmoor coal mine claim the Member for Wollondilly has "misled" constituents regarding the Tahmoor South extension.
The union representing the coal miners says without the extension, more than 400 local miners will lose their jobs in 18 months when existing coal reserves at the Tahmoor coal mine are exhausted.
In a statement, the Construction Forestry Maritime Mining And Energy Union said MP Nathaniel Smith had falsely claimed the extension plan included mining directly under the entire township of Bargo, which has well over 1000 homes.
The union says the Tahmoor South mine extension will secure the 400 direct jobs for another decade, and support hundreds of other jobs in the community.
The union also says property developers want to clear bushland to create a new residential subdivision in Bargo.
"It's deeply concerning to see the local member attempting to whip up hysteria that only aids property developers and hurts local employment," CFMMEU South Western District vice-president Bob Timbs said.
The expansion bid seeks to extract up to four million tonnes of coal per year over 10 years, continuing the employment of what the Department of Planning, Industry and Environment said were 400 people who worked at the mine.
Last month, Mr Smith lashed the NSW government's recommendation that the Tahmoor coal mine be allowed to expand and directly undermine 143 houses in Bargo. The MP criticised the timing of the recommendation, and the impact on homes.
"The original DA gives clear insight into the intent of this project - to eventually mine directly under the entire township of Bargo," he said in December.
On Monday, Mr Smith said anyone who had read his submission on the Cumberland Plains Plan "will know my desire to protect the rural characteristics of my electorate".
"My motivation in stopping mining beneath the family home is simple," he said. "I have seen and heard too many heart-breaking stories of misery dealing with mine subsidence compensation claims. The entire process can last more than five years and is anything but quick, simple and straight-forward.
"While Mr Timbs and the CFMMEU advance the interests of foreign billionaires, I will continue to inform and represent the families of Bargo of the devastating impact mine subsidence can have on the family home and lives."
The DPIE has referred the expansion bid to the Independent Planning Commission, which will hold a public hearing in February.
DPIE recommended the expansion be approved, saying the removal of three longwall panels from the application would significantly reduce the extent and scale of subsidence impacts, and appropriate laws were in place to manage subsidence impacts and compensation.
The Tahmoor mine produces premium coking coal used in high-grade steel products made at Port Kembla, Whyalla and overseas.
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