A dispute at a West Australian coal mine could lead to a shortage in electricity supply across the southern half of the state if it is not resolved soon.

Workers at the Griffin coal mine in Collie were told by their employer Carna Civil Mining to stop work last Thursday over concerns they would not get paid.

Carna is contracted by the mine's parent company, Lanco Infratec, to provide 260 production workers at the mine.

The Construction, Forestry, Mining and Energy Union (CFMEU) boss Gary Wood said Carna was owed millions of dollars for work done at the mine.

"It's a considerable amount of money and Lanco Infratec just haven't been paying their bills," Mr Wood said.

"And obviously it's been brought to a head and the workforce has basically ceased work."

WA Premier Colin Barnett ruled out government intervention in the dispute but said extra power supplies could be called upon if need be.

"The Government has excess power generation across the south-west grid so I think we can maintain power supplies," he told ABC South West WA.

"But we're not going to be putting taxpayers' money into this dispute."

Mr Wood said a skeleton workforce remained on site, with Carna paying all of its employees despite the stop-work action.

"It'll be paid upfront by Carna and that'll obviously go onto the Lanco Infratech bill - that's part of the contractual arrangement between Lanco and Carna," he said.

"But how long that's sustainable and how long Carna can carry that forward is unknown."

Power station relies on coal supply

The Bluewaters Power Station, also in Collie, relies on coal supply from Griffin.

The work stoppage at Griffin has forced Bluewaters to start using its stockpile of coal, which the ABC understands will run out in a matter of days.

Griffin originally developed Bluewaters as a way to take up coal production, but it was sold off as part of the sale of assets after the financial collapse of Griffin in 2010.

Bluewaters provides 10 per cent of the state's electricity supply.

However, Griffin's management has previously explained to the ABC that turning off Bluewaters would affect more than 10 per cent of the state's power, due to seasonal peaks and troughs in demand.

Minister for Energy Mike Nahan told the ABC in a statement he was not planning to get involved.

"This is a commercial matter for Griffin Coal and its contractors to work through and resolve," he said.

"Whilst the State Government is not a party to this matter, it continues to closely monitor the situation."

Last week, Griffin Coal chief financial officer James Riordan confirmed workers at the coal mine have stopped work over "contractual issues".

He said he anticipated the issue would resolved shortly, but despite several meetings this week, the parties were yet to come to an agreement.

Mr Riordan has been contacted for comment today.

Indian infrastructure group Lanco Infratec acquired the assets of collapsed miner Griffin Coal in 2011 in a sale said to be worth up to $850 million.

Griffin went into administration in January of that year with debts of up to $1 billion, putting 400 local jobs in doubt.

Lanco has also been contacted for comment.