The continuous miner was cutting a plunge when the operator noticed smoke coming from the area around the cable handler.

As the machine was flitted back a pop was heard and a flash was observed.

It was determined, upon inspection, that an electrical arc had occurred leaving visible evidence of arcing.

The NSW Resources Regulator said the electrical protection did not operate.

"Electrical protection systems must be maintained to ensure they operate correctly when a fault occurs," it said.

"Protection settings need to be aligned with the site protection study.

"Good maintenance practices must be in place to ensure that cables are used and maintained as per site cable standards."