The coal industry in the Hunter Valley could leave taxpayers with annual health bills running into the hundreds of millions of dollars and further mine expansion should be halted, a report released by 28 health groups says.

The Coal and Health in the Hunter report by the Climate and Health Alliance estimates that burning coal for electricity in the valley alone produces health damage in the order of $600 million annually from the resulting air pollution, including the release of small particles.

Liddell Power Station in the Hunter Valley. Credit:Jonathan Carroll

The particulate matter from coal, measured in 2.5-10 millionths of a metre in diameter, "lodges into the linings of the blood vessels and causes inflammation and irritation, and leads to long-term cardio-vascular and lung disorders", said Liz Hanna, president of the alliance and a research fellow in epidemiology at the Australian National University.

"It's not just people falling ill today, but also the negative impacts [coal is] going to have on their systems so that they end up with cancers in years to come," Dr Hanna said.