Illawarra mines will get licence to take drinking catchment water in move blasted as cynical

Minister for Water Kevin Anderson ordered Water NSW to issue the licences to Peabody's Metropolitan colliery, South32's Dendrobium mine, and Wollongong Resources' Wongawilli and Russell Vale operations.

The move recognises the significant quantities of water leaking from the catchment Special Areas' creeks and swamps into mine voids, as subsidence causes creekbeds and bedrock to fracture and crack.

Read more: Candidate bucks party line on Illawarra water catchment mining

Mr Anderson said it was important these mines account for the water they take and pay management charges like other water users.

"This reform is something environmental groups and an independent assessment panel have been calling for," he said.

"The environment and other water users will not be negatively impacted by these changes."

But critics say the Government is rubber-stamping environmental damage that should never have been allowed to happen.

"After years of saying there would be no impact on water supply from these coal mines, the government has now been forced to admit uncontrollable losses of water, due to the cracking of creeks and rivers," Nic Clyde from anti-coal group Lock the Gate said.

"Coal mines in the catchment have been effectively taking water unlawfully without proper water entitlements for years now, and this is the NSW Government rubber-stamping that behaviour and setting up a scheme so they can continue on unimpeded."

Enacting the order in the Government Gazette, Mr Anderson claimed mining companies could not stop the water leakage, and couldn't buy water licences on the open market.

"Companies operating underground coal mines in these Special Areas are unable to secure enough water allocation through the water market to authorise their incidental surface water take," he said.

"These companies cannot stop their incidental surface water take, and surface water losses would continue irrespective of whether the mines continue to operate.

"If this water take is brought into the framework of the Water Management Act 2000 it provides greater transparency and equity amongst water users, in line with what other mining companies and water users within the region and across the state are required to do."

Mr Clyde said the timing, just before the Government went into caretaker mode before the election, was poor.

"This is a cynical attempt by the NSW Perrottet Government, in the lead up to the election, that seeks to legitimise the illegal behaviour coal mining companies have been getting away with for years," he said.

"Instead of responding to this devastating risk to our future by urgently banning any further longwall coal mining in Sydney's drinking water catchment, the government will instead provide water entitlements from urban water supplies to paper over the problem.