The Austar Coal mine has been fined for pollution leaking from its site into a nearby creek in July last year.
The miner pleaded guilty and was fined more than $115 000.
It was ordered to pay $75 000 towards an environmental rehabilitation project and around $42 000 in legal costs.
According to the chief environmental regulator for the EPA, Mark Gifford, the "fine reflected to need for companies such as Austar to take every precaution to ensure that pollution doesn’t occur".
The original incident occurred in July, when wastewater from an onsite septic tank leaked into the Bellbird Creek, near Cessnock.
"The wastewater contained detergent and effluent from bathhouse facilities located on the Austar site and caused large clumps of white foam up to 2 metres high to be washed downstream," Gifford explained
"The elevated levels of detergent, nutrients and faecal matter along approximately 2km of Bellbird Creek were toxic to aquatic life.
"This incident could have been prevented if Austar had an appropriate system in place to inspect, monitor and maintain the 90 year old onsite septic system," he added.
During the trial judge Brian Preston noted that the age of the septic system – 90 years or so – increased the risk of potential defects in its structure and the potential for a spill.
The Austar coal mine is an underground longwall operation owned by Yancoal.