A coal mine has been fined for “unacceptable” damage to world-renowned NSW rock formations. 

A NSW Department of Planning, Industry and Environment (DPIE) investigation has found that Centennial Coal's Mount Airly operation, near Lithgow, caused fractures to important pagoda rock formations.

The stone towers do not occur anywhere else in the world, and are dated between six million and 10 million years old.

“Following an investigation by our compliance officers, we have determined the breaches are unacceptable,” a DPIE spokesperson said.

An independent review conducted on Centennial Coal's behalf found 15 surface cracks related to mining activity in the Gardens of Stone, the biggest of which was 250 metres long.

The damage was reportedly caused by the caving-in of land below the rock formations. The mine sits about 300 metres below the surface, and has caused subsidence (ground movement) in excess of 700 millimetres in some sections, more than five times the allowed limit of 125mm.

The company has been ordered to carry out remediation work, which includes filling some of the cracks, but some are concerned that the full extent of the damage could take years to uncover.

Centennial Coal concedes that there may be more cracks that have not yet been identified.

The company was fined $150,000 for breaching its consent obligation, with the money to be spent on NSW National Parks and Wildlife Service's conservation work in the area.

“The company will also be required to continually monitor and remediate any future cracks identified over the life of the mine,” a DPIE spokesperson said.

Centennial Coal last year secured permission to mine up to 1.8 million tonnes of coal a year until 2037.

The company claims to have reviewed its mine design to develop wider pillars in an attempt to keep subsidence at allowed levels, and says it has “implemented changes to achieve its performance criteria”.

The geological issues have thrown doubt on the NSW government's plans to turn the Gardens of Stone SCA into an eco-tourism destination for 200,000 visitors a year.

NSW Deputy Premier Paul Toole has admitted that there will be areas that “we won't have people going into”.