The water cart was being operated underground when the operator spotted smoke and flames coming from the engine bay.

He immediately jumped out of the cabin and grabbed a hand-held extinguisher to extinguish the flames.

However, the fire reignited, forcing others to come and help the operator battle the blaze.

When the fire started spreading an emergency alarm was sounded and workers in the vicinity were ordered to the mine's refuge chambers.

According to the New South Wales Resources Regulator, the failure of oil and fuel lines near exhausts and turbochargers was a well-known cause of fire.

It said mines should also have other controls in place to prevent fires.