"Geological challenges" found in a new area of Springvale Mine have impacted the quantity and quality of coal being supplied to Mt Piper Power Station.
Katie Brassil, EGM Corporate Affairs for Centennial Coal, stated Centennial would be delivering coal from its other two mines in the area to help cover the shortfall.
"There will be additional coal trucked from Clarence Colliery and Lidsdale Siding at Wallerawang is being modified to allow coal to be delivered by rail from Airly Mine," she said.
Earlier on Wednesday, September 4, Mt Piper Power Station's parent company, EnergyAustralia, announced the station would be reducing its operations over the coming months to conserve coal due to an "acute coal shortage".
The company estimated the power station has generated about 40 per cent less electricity so far in 2019 compared to the same time last year.
To meet Mt Piper Power Station's longer term coal supply needs, Centennial Coal would be progressing with the appropriate approvals to reopen Angus Place Mine, Ms Brassil said.
"With a mine life consistent with the life of MPPS (2042), Angus Place will provide long term continuity of coal supply to MPPS and ongoing employment for our Springvale workforce."
Lithgow City Council mayor Cr Ray Thompson said the council had been briefed on the issue prior to the announcement on Wednesday and remained very positive about the region's ability to be able to supply coal to Mt Piper in the long term.
"I'm confident, from what we've been told, that Springvale will be able to come back on stream in time for the summer months," he said.
In the meantime, he said council had supported Centennial Coal's applications for increased coal movements by road to help supplement the supply.