Bass Electrical has ceased all work for Gujarat NRE until it is paid more than $1 million in back pay its owed, the company claims.
Managing director of Bass, Brett Chambers, said the contractor stopped work at the NRE No1. coal mine a fortnight ago and will not resume until paid, the ABC reports.
Chambers says Gujarat promised to pay it this Friday.
"We just wanted to resolve payment issues before we continue any further," he said.
"I just hope that everything gets resolved and that we can continue to have a good working relationship with them".
It comes as the miner's parent company goes to shareholders to raise another $100 million for the Australian company.
Gujarat received approvals to start longwall operations at its NRE No.1 colliery at Wongawilli late last month.
Regarding the development, Gujarat chairman Arun Jagatramka said "the grant of approval to commence longwall production at NRE No.1 mined vindicates our commitment and belief to have the two hard coking coal mines under longwall operations before the end of March.
Jagatramka went on to say that this approval will ensure around 600 jobs in the region.
Jagatramka has recently come under attack after ecovandals graffiti-ed his house.
In an open letter claiming responsibility the vandals said: “… we refuse to sit idly by like ‘good’ lawful protesters, we will turn our outrage into action”.
"In attacking [Jagatramka’s] property we wished to send him a signal that neither his money nor the police can protect him from those who love wild nature more than money."