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Coal mines get access to Sydney drinking water stocks

A last-minute move from the NSW government has given mining companies access to water in Sydney's drinking water catchment, raising alarm with environmental activists.

In a government gazette sent five days before the NSW parliament was suspended, Water Minister Kevin Anderson gave new allowances to coal mining companies on the Sydney fringe, allowing them to trade water stocks from Sydney's drinking water catchments.

The direction was sent to the Board of Water NSW.

The gazette said it was "necessary ... to give a direction to Water NSW in the public interest" to make a joint application to trade water allocation to specified mining companies in certain circumstances.

The direction covers the Woronora and Metropolitan Special Areas of the Sydney drinking water catchment.

Environmental activists say the directive was a cynical move before NSW election on March 25 and a shift to an El Nino cycle.

"Coal mines in the catchment have been effectively taking water unlawfully without proper water entitlements for years now," said Nic Clyde, co-ordinator of anti-mining collective Lock the Gate Alliance.

"This is the NSW government rubber-stamping that behaviour and setting up a scheme so they can continue on unimpeded.

"The risk to our water supplies as we start to shift into an El Nino cycle is immense and our precious urban water supplies should not be wasted on destructive coal mines."

Greens MP Cate Faehrmann said Mr Anderson's decision was an acknowledgement of the impact coal mining was having on Sydney's water catchment.

"Yet instead of acting to protect our water supply, they're locking in decades of water loss at a time when we are going to have less water to sustain a growing population," Ms Faehrmann said on Friday.

But Mr Anderson said the decision made sure mines in the Sydney drinking water catchment were required to account for the incidental surface water they take.

WaterNSW will not be required to trade with mines if there is not enough allocation available.

"This is in response to issues raised by the independent expert panel for mining in the catchment during its review of the impact of mining activities in the special areas," he told AAP in a statement.

"It is important these mines account for their water take and pay management charges for this water, just like other water users.

"This reform is something environmental groups and an independent assessment panel have been calling for."

The new trading rule would not impact water supply to Sydney, he said.