The state government has given the go-ahead for coal mining under Woronora Dam, rejecting appeals by environmental and community groups and a hard copy petition signed by more than 10,700 people.
The decision was made before a scheduled debate in State Parliament last month, which had to be postponed when sitting days were shortened due to the coronavirus outbreak.
Planning Minister Rob Stokes approved extraction plans submitted by Metropolitan Coal, a subsidiary of multinational Peabody Energy.
A spokeswoman for the Department of Planning, Industry and Environment said the proposed mining beneath Woronora Reservoir was approved in 2009.
"This approval relates to an Extraction Plan which is not a new development application," she said.
"An Extraction Plan outlines the proposed management, mitigation, monitoring and reporting of potential subsidence impacts of mining that has already received planning approval."
The spokeswoman said the Extraction Plan for Longwalls 305-307 [two of which go under the reservoir] were approved with strict conditions, including comprehensive monitoring and adaptive management, after comprehensively assessing the plan over six months.
"The assessment included consultation with WaterNSW, the Dams Safety Committee, and the Independent Expert Panel for Mining in the Catchment," she said.
"The department adopted all of the expert recommendations in the conditions imposed on the proposed mining.
"The monitoring data will be regularly reviewed by the Woronora Reservoir Impact Strategy Panel, WaterNSW and the Department to ensure compliance."
Sutherland Shire Environment Centre spokeswoman Catherine Reynolds said approving the proposal before the scheduled parliamentary debate "shows complete contempt for the community".
Last year, environmental and community groups joined forces in an appeal to the state government to end longwall coal mining under the Special Area of the catchment.
The groups called on the government to place an immediate moratorium on existing mining, cancel any other permits and refuse future extraction plans.
"We further ask the government to confer the designation of nature reserve on this area," they wrote.
"Doing so would help preserve the important habitats, such as endangered coastal upland swamps that are vitally important for filtering and maintaining our water supply."
Signatories included Sutherland Shire Environment Centre, Nature Conservation Council, Greenpeace, Total Environment Centre, and the National Parks Association Southern Sydney Branch.
The letter was also signed by representatives of Woronora Valley Residents' Association, Bundeena Progress Association, North Cronulla Precinct Committee, Otford Community Association, Grays Point Progress Association, Georges River Environmental Alliance, Illawarra Local Aboriginal Land Council and the group POWA - Protect Our Water Alliance.
Before and after photos, taken in 2014 and 2019 in the Eastern Tributary of the Waratah Rivulet leading to Woronora Dam, were used to illustrate "the damage being done by existing mining".
The later photos show greatly discoloured water.
The groups said water was seeping into bedrock cracks, releasing metal contaminants such as iron, manganese and aluminium, which is turning the water orange and green.
Special Areas around Sydney's drinking water catchments are mostly unspoilt bushland from which the general public is banned.
Chair of Sutherland Shire Environment Centre, Tassia Kolesnikow, said, "No other country appears to allow longwall coalmining under their publicly owned drinking water catchments".
"It doesn't make sense to risk our water supply in this way."
A spokeswoman for Peabody Energy said, "These recent approvals will allow our Metropolitan Mine to continue to supply critical steel-making or metallurgical coal to the Port Kembla steelworks and to provide jobs for more than 400 hundred local mining families in Helensburgh and Wollongong during these unprecedented times".
"Metropolitan is proud of its proven track record of protecting the environment and our conservative mining techniques have ensured there has been no connective cracking between our underground mining operations and the surface and therefore no loss of surface water from the Sydney Water Catchment into the mine," she said.
"This strong environmental performance was confirmed by the recent Independent Expert Panel for Mining in the Catchment Report which states that the Metropolitan mine 'displays no evidence of a connected fracture regime to surface'; and that 'losses of water from the Woronora Special Area due to mining impacts associated with Metropolitan Mine are negligible' and that 'there is no evidence that mining in the Special Areas is currently compromising the ability of WaterNSW to meet raw water supply agreements standards.'.
"The high-quality coal produced at Metropolitan is a critical ingredient for making the steel that builds homes, schools, hospitals and bridges Australian and around the globe.
"There is currently no viable alternative to the use of coal in primary steel production. Without our coal, and steel from the Port Kembla steelworks, the community would lack the essential building blocks for every structure we see in our towns and cities."