Sydney's drinking water catchment is under threat from longwall mining operations, with research confirming upland swamps and streams are drying out.

Key points: Research indicates longwall mining has been drying up NSW swamps that provide drinking water

Research indicates longwall mining has been drying up NSW swamps that provide drinking water Mining company South32 plans to expand its operations in the Cordeaux Dam area

Mining company South32 plans to expand its operations in the Cordeaux Dam area Environmental groups are calling for mining expansion in the area to be stopped

A study conducted by the University of New South Wales has revealed that the impact of mining operations south of Sydney are becoming more widespread.

Mining company South32 wants to extend the life of its Dendrobium Colliery, south of Sydney, where it extracts 5.2 million tonnes of coking coal each year for steel-making.

Duncan Rayner, the principal engineer at the UNSW Water Research Laboratory, said the company's existing operations beneath the water catchment have undermined some of the upland swamp's sandstone beds, meaning many of them can no longer store water.

Longwall mining, which involves the creation of a horizontal shaft underground, can cause cracking in the river and creek beds above.

"Temperate highland peat swaps are endangered ecological communities that act like a sponge and a filter, releasing pure drinking water," Mr Rayner said.

"What we're seeing from swamps that are undermined, or that have had longwall mining going underneath them, is that those swamps no longer hold water.

"Their underlying sandstone is cracked and the swamps have dried out."

This swamp in the Cordeaux Dam would be impacted under South32's expansion plans. ( ABC Illawarra: Justin Huntsdale )

Swamps crucial during drought

The university has been researching the area for the past five years on behalf of Water NSW and alongside the Office of Environment and Heritage.

"The impacts have been the same for as long as longwall mining has been undertaken," Mr Rayner said.

"But mining operations are expanding, so the impacts are expanding."

The swamps provide vital drinking water to Sydney and the Illawarra, and Mr Rayner said the impacts on the systems are being exacerbated by the drought.

"These swamps are more important during drought periods because of their ability to store water and release it slowly over time," he said.

"So the fact that this is ongoing during a drought period is a bad outlook for water flowing downstream, and a bad outlook for the watercourses that rely on water from these swamps."

Julie Sheppard says the Cordeaux Dam catchment is a vital source of drinking water and must be protected. ( ABC Illawarra: Justin Huntsdale )

Fears damage 'irreversible'

Several environmental groups have collaborated in opposition of South32's proposal to continue mining in the catchment until 2048.

Julie Sheppard from the National Parks Association said she is distressed by the ongoing degradation of Sydney's Drinking Water Catchment.

"Obviously the land is going to be dry in the drought and that's even more reason why we shouldn't have any further stresses on the vegetation and the water-holding capacity of the catchment areas," Ms Sheppard said.

"You've got to wonder if these catchments can even cope.

"If we have a fire through the catchments in summer, then we could see massive impacts that will destroy the swamps forever."

Ms Sheppard has been observing and reviewing the impact of mining operations in the area since 2005 and said there is no way to repair the damage to the swamps.

"The repair of the cracked bases of the swamps has never been done — there is no example of this having ever been done, so they don't know how to do it," she said.

"And yet we're continuing to allow mining in a water supply area that is incredibly important to the people of greater Sydney and the projected increase in population in greater Sydney.

"It does upset me greatly.

"It's dispiriting and depressing and frustrating and makes me very angry."

In its submission to the independent Expert Panel for Mining in the Catchment, Water New South Wales said its opposed to operations at the Dendrobium Colliery being extended.

"WaterNSW holds the firm view that no further longwall mining should be approved within the Special Areas with dimensions of the size currently undertaken at the Dendrobium mine," a WaterNSW spokesman said.

Mining company South32 said it will offset impacts to upland swamps affected by its longwall mining. ( ABC Illawarra: Justin Huntsdale )

South32 responds to environmental concerns

In its Environmental Impact Statement (EIS) as part of its application to extend the life of its Dendrobium mine, South32 said it will not mine under water supply reservoirs, which are referred to as watercourses and key stream features.

"We will compensate WaterNSW for the agreed volume of surface water diverted from the Sydney drinking water catchment, which is estimated at less than one per cent of the Avon and Cordeaux catchment yields," the statement said.

The company said it would offset potential subsidence-related impacts to upland swamps consistent with government policies.