The Environment Protection Authority has determined that black material found on a beach in the Hacking River was not recent coal waste from a Helensburgh mine.
Sutherland Shire Environment Centre notified the EPA after the discovery at Swallow Rock Reserve, Grays Point at the end of December.
The environmental group feared the material had come recently from Peabody Energy's Metropolitan Mine, which has been involved in several pollution incidents over the last year.
An EPA spokeswoman said its officers inspected the material and determined it was wood charcoal, which was commonly found in the environment.
"The images provided by SSEC to the EPA showed a black material that appeared to be coal and is likely to be legacy coal material," the spokeswoman said. "This material is different to the coal fines discharged during recent incidents from Metropolitan Collieries."
While the mining company has been cleared in this matter, a review of its Environment Protection Licence by the EPA is ongoing, and the deadline for community submissions has been extended until February 3.
The EPA announced in late 2022 a review into the licence would be bought forward by two years and would include looking at "all available options to protect the environment and community, including suspending the licence".
EPA chief executive Tony Chappel said the move "follows multiple alleged non-compliances including discharges of coal material into Camp Gully Creek, which runs into the Royal National Park".
"This review will commence immediately as the repeated discharges of coal material into our pristine environment is unacceptable," Mr Chappel said.
"Yesterday, we saw another incident when EPA officers were conducting routine monitoring at Camp Gully Creek and observed grey, turbid water with possible coal material present."
"It is disappointing to see multiple incidents in a matter of months. We expect far better from our industry neighbours, who have a responsibility to operate in accordance with their licence for the health of the environment and community."
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