The badly injured koala was found by the road on the boundary of Hanson's Brandy Hill Quarry, which has proposed lifting production from 700,000 tonnes to 1.5 million tonnes of material for roadworks. The proposal requires the destruction of 46 hectares of designated koala habitat which Hansons proposes to offset with koala habitat outside the Hunter.

The koala required surgery and is unlikely to be able to climb a tree again, said Brandy Hill resident Chantal Redman, one of many local residents strongly opposed to the quarry expansion.

"There is plenty of evidence we have a koala population that needs to be looked after. The quarry proposes to clear 46 hectares of designated koala habitat and offset it with land somewhere else but it doesn't make sense," Ms Redman said.

"We're becoming one of the last breeding areas for koalas yet we're destroying their habitats. These koalas are already competing for smaller and smaller parcels of land."

A recent $200,000 Port Stephens Council grant for a koala hospital was welcomed, but "we need to be proactive about protecting koalas rather than reactive when we don't", Ms Redman said.

In a response to nearly 200 submissions Hanson said it would reduce traffic movements and proposed to limit heavy vehicles from the site to 30 per hour, "consistent with current experience".

It resisted residents' push against a 24-hour operation and proposed no more than 301 laden loads from the site between 7am and 10pm, and no more than 58 laden loads between 10pm and 7am.

Hanson said its road infrastructure and maintenance contributions over the proposed 30-year life of the extension project would be more than $12 million.

It argued potential koala impacts of an expanded operation "would not result in a significant impact to the local population of this species".

The Department of Planning has asked Hanson for more information after the Environment Protection Authority strongly criticised the company's approach to likely air quality impacts from an expanded quarry.

The EPA was "disappointed" the company had "again failed to address the EPA's concerns" on its third attempt at an air quality impact assessment. The environmental watchdog recommended Hanson "seek an independent review by a suitably qualified expert before resubmitting the document".

Earlier EPA reviews found inaccuracies in the emissions inventory and model assumptions, the practicality of mitigation measures in the air quality management plan and approach to assessment of cumulative impacts of coarse particle dust pollution.

Hanson "significantly underestimated" calculation of vehicle kilometres travelled on unpaved roads which is a major contributor to dust pollution impacts, the EPA said.

It considered some proposed controls "unfeasible", including a Hanson proposal for continuous watering of haul roads.

The EPA said expected changes to the air quality methodology would "likely increase the predicted emissions" of the project.

The EPA warned the Department of Planning that while air emissions and dust from the quarry could be regulated by the EPA under an environmental protection licence, it was unable to regulate truck movements to and from the premises.

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