Wollongong Coal proposes extending underground mining operations at the existing Russell Vale Colliery in Russell Vale, located within the Cataract Reservoir catchment, which is a designated source of drinking water for Sydney.
Ley said no mining was proposed beneath the full supply level of the Cataract Reservoir.
"The proposed action will involve extraction of coal from the Wongawilli Seam," she said.
"This seam lies beneath the Bulli and Balgownie Seams which have already been historically mined in some areas.
"To provide stability and reduce the likelihood of subsidence the proponent is proposing to use bord and pillar mining. This method involves leaving in place supportive pillars that are designed for long term stability."
The extension involves extracting approximately 3.7 million tonnes of run-of-mine coal over five years not exceeding 1.2Mt annually and a production rate not exceeding 1Mt of product annually.
The action also includes the emplacement of 200,000tpa of reject rock material within the underground mine workings, if it cannot be beneficially reused.
The proposed action will not involve additional surface disturbing activities or the clearing or removal of vegetation.
The water treatment facilities required to treat adit discharge water are not included as part of the proposed action.
"An Adit Discharge Water Management Plan will establish the processes for implementing the necessary treatment measures," Ley said.
"It is expected that the treatment facilities will be located within existing disturbed area, however, an assessment will be undertaken to ensure the treatment facilities meet state and Commonwealth regulatory requirements."
The proposed action study area covers the surface and subsurface areas of Wonga East and Wonga West. While Wonga West is considered part of the existing colliery and has been historically mined, the proposed action will occur only at Wonga East.
Wonga East is located on the lllawarra Escarpment, with the colliery pit top on the lower slopes of the escarpment bound by Princes Highway to the east, and the residential areas of Russell Vale and Corrimal to the east and south.
The development footprint is approximately 970 hectares.
The proposed action area includes 39 upland swamps. Each of the 39 swamps are considered to meet the EPBC Act listing criteria for the Coastal Upland Swamps in the Sydney Basin Bioregion ecological community.
These swamps have an average size of 1.26ha and cover a total area of approximately 49ha.
Twenty-seven of these Coastal Upland Swamps are located over the proposed bord and pillar workings. All references to "swamps" in these reasons are references to swamps that meet the EPBC Act listing criteria for Coastal Upland Swamps.
The project has been assessed and approved under the NSW Environmental Planning and Assessment Act 1979.
Lock the Gate Alliance NSW spokesman Nic Clyde said it was "astonishing to see the Minister shrug off her duty to protect the health of children in order to do the bidding of the coal barons".
"Greater Sydney is the only large metropolis in the world where coal mining is allowed beneath its drinking water catchment," he said.
"Instead of approving this mine, we should be looking at how we can better prepare for a future where coal is no longer needed."
Wollongong Coal was approached for comment.
