The Oceanic Mine is part of Xstrata’s West Wallsend Colliery near Newcastle, which began longwall mining under Diega Creek in 2000.
The longwall process has angered residents who say it has damaged the creek bed, ABC Online reported.
A spokesman for the Diega Creek Landcare Group, Peter Quist, told ABC Online that as a result of the damage no water is being retained.
“Down the end towards Barnsley, my neighbour’s end, it's a crack that's around 10cm wide," he said.
Xstrata Coal admits longwall mining has contributed to subsidence in the creek, but says grazing has also played a role.
A spokesman for Xstrata said the company only became aware of the cracking eight weeks ago and is now working with landholders and the relevant authorities to fix the problem.
