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A spokesman for the Planning Department said South32's licence was granted under the Operational Allocation Framework only allows miners to make an application to explore on land adjacent to an existing mine.
"An exploration licence does not allow any mining to take place," the spokesman said.
The West Cliff Colliery in the Dharawal State Conservation area, near Appin, south of Sydney, has been the subject of a number of non-compliance reports since 1999.
Photo: Kate GeraghtySouth 32 operates four collieries in adjacent areas to the Picton exploration area.
"If the application is approved, exploration activities would only be conducted within an approved area and according to strict government guidelines," said a spokesman for the miner, formerly part of BHP. "We have been engaging with the local community over several weeks to explain the exploration process and listen to feedback."
The NSW Greens, though, questioned the approval of South32's licence, noting that its mines in the area had clocked up hundreds of non-compliance reports since 1999 at the four mines - West Cliff, North Cliff, Appin and Appin West Collieries - and yet had never received a penalty notice.
Jeremy Buckingham, the Greens mining spokesman, said it was hard to understand why the government would consider granting a new coal exploration licence in the Sydney basin "to this repeat offender".
A section of the West Cliff Colliery site run by South32, which has had its mining exploration licence extended.
Photo: Kate Geraghty“BHP’s south-west Sydney coal mines have breached their environmental protection licences 447 times in the past 18 years without any consequences, making a mockery of the law," he said.
"We take our environmental responsibilities seriously and our decisions reflect this," the South32 spokesman said. "The potential exploration activities would not have an impact on water supply."
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A spokeswoman for the NSW Environment Protection Authority said that "in all cases of non-compliance, action was taken that was appropriate to the nature of the breach".
"Minor licence breaches such as sampling errors, instrument failures or minimal exceedances of licence limits do not warrant penalties," said, adding that all non-compliances were recorded on the EPA Public Register.
The other four licences that the government is seeking to have extended include 516 square kilometres of land to the east and west of Campbelltown, 265.5 square kilometres near Moss Vale, a 52 square-kilometre region south-west of Camden, and 172 square kilometres north-east of Camden.