Australia's largest power station, Eraring, is running out of coal to fire its turbines. 

Origin Energy has told the Australian Stock Exchange its coal stockpiles are running low at its Lake Macquarie plant, north of Sydney.

Origin recently revealed Eraring would be closing in 2025, seven years earlier than planned.

It said Eraring has been impacted by production constraints at the nearby Mandalong coal mine owned by Centennial Coal.

Mandalong provides coal to both Vales Point and Eraring power stations, producing up to 6 million tonnes of coal annually.

In an investor briefing after the announcement, coal analyst Rory Simington said he was perplexed by the situation.

The ABC has been told no coal was being produced at Mandalong at present, leaving Origin to source it from elsewhere.

Coal from the Mandalong mine is transported directly on a conveyer belt to Eraring, making the process quick and efficient.

But finding alternate sources has meant getting trains to bring the coal in.

Origin has told the ABC that had caused problems, as trains it had commissioned were competing for freight line space against other coal and commuter trains.

It also has to pay a spot coal price, which is much higher, impacted heavily by the Russian invasion of Ukraine.

Origin has a coal stockpile at its Eraring power plant site of up to 1.6 million tonnes.

But a source close to the operation has told the ABC that pile was very low.

The source said workers were "scraping up the dregs off the bottom of what's left of the coal stockpile to keep things going".

They added that Origin knew of potential supply problems.

Origin has confirmed the source's information, adding that trains to Eraring have been bumped in favour of ones travelling to the Port of Newcastle for the lucrative export market.

To add to the woes, Centennial is still reeling from an accident that sparked a regulatory investigation at Mandalong last month.

Two workers were injured, but the incident has not been linked to supply problems.

Centennial Coal said it was continuing to work with all customers to meet its contractual obligations.

It said other power plants also had supply issues.

Mine approval recommendation coincides with supply woes

At a time when Eraring is experiencing supply issues, there has been optimism in the Upper Hunter where a mine expansion is recommended for approval.

MACH Energy wants to expand its Mount Pleasant Coal mine near Muswellbrook to extract an additional 247 million tonnes of coal.

It would extend the life of the mine by 22 years up to December 2048.

The NSW Planning Department put MACH Energy's plans on public display early last year and attracted 250 submissions.

In a letter to the Independent Planning Commission, the Department said due to more than 50 unique objections to the project, it had requested the commission hold a public hearing.

Planning officials said they considered the benefits of the project outweighed the costs, and the project was approvable subject to conditions.

The company has offered to enter into a planning agreement with Muswellbrook Council to contribute $20 million to community projects.

Muswellbrook Council general manager Fiona Plesman has welcomed the plan.

"We meet and look at the various projects that they can be distributed to. We are putting more and more of those funds into looking at alternative futures."

The mine expansion is being recommended for approval at a time when there are warnings Australia is on the brink of an energy crisis.