Hunter Valley Operations has been ordered to pay $400,000 to environmental improvement projects following a water pollution incident at Singleton last year.
The pollution was a result of rainfall runoff from a rehabilitation slope at the Lemington Road mine being discharged into an adjacent waterway which flows into the Hunter River.
"The rainfall caused the sediment-laden water to flow into Farrells Creek through holes in a contour bank in a formerly mined area," the Environment Protection Authority's metro north director Adam Gilligan said.
"The contour bank was designed to divert water away from the creek but it can't do this if is not properly maintained and erosion has occurred."
The mine, a joint venture between Glencore and Yancoal - will pay $100,000 to a project on travelling stock reserves in the Singleton area to improve conservation and management of soil erosion.
It is required to develop and implement a remediation plan for an area within the mine site with an estimated cost of $250,000 and conduct an annual inspection of all rehabilitation areas across the mine site, at a cost of about $50,000.
Hunter Valley Operations, which is operated by Glencore, is also required to pay the EPA's legal, investigation and monitoring costs of approximately $30,000.
Enforceable Undertakings are used as an alternative to prosecution. The undertaking is enforceable by the Land and Environment Court.
Mr Gilligan said it was determined from water testing and the duration of the incident that there was minimal harm to the environment but it was timely to remind all mines that water management systems must be monitored and checked regularly.
As part of developing and implementing the remediation plan, Hunter Valley Operations will need to undertake a number of activities including surface water assessments and repairing contour banks.
"Remediation will take several forms including repairing slope erosion, re-seeding the area and undertaking agronomic and surface water assessments."
Hunter Valley Operations is also required to publish notices in publications, including the Newcastle Herald, as part of the enforceable undertaking.
A Glencore spokesman said the company was disappointed by the event and accepted the regulator's findings.
"We take our environmental obligations very seriously and immediately put in place actions to guard against a similar event occurring," he said.