The dust plume was seen and photographed on Friday afternoon by Newcastle environmentalist Brian Purdue, who was driving along the Golden Highway at Jerrys Plains when it came into view.

"It seemed pretty enormous to me but I wasn't sure how often this sort of thing happened," Mr Purdue said.

Hunter Valley Operations is owned by the Rio Tinto subsidiary Coal & Allied, and spokeswoman Alison Smith said Friday's incident was "highly unusual".

"A yellow to orange plume is occasionally visible immediately after a blast, but is quickly dispersed by the wind," Ms Smith said.

"The colour comes from the interaction of water with the explosive material, or interaction with some clay material.

"The wind direction was considered prior to firing, but the density of the plume was extremely unusual.

"We have contacted the explosives supplier to help us determine the cause, and to discuss possible mitigation methods to ensure it does not happen again."

Dust and blasting noise have been major points of dispute between the coal industry and Hunter Valley horse studs.

Henry Plumptre, the managing director of Darley Australia, said the photograph was "unusual" but "dust from the spoil piles and the pits themselves are a daily occurrence".

"Flying in from Sydney the dust is particularly noticeable close to Muswellbrook," Mr Plumptre said.

Alisha Chapman, a spokeswoman for the NSW Department of Environment, Climate Change and Water, said a full report had been sought from Coal & Allied and "any exceedences or breaches of licence will be acted upon".

Ms Chapman said the State Government had agreed to set up a "high-quality ambient air monitoring network" of as many as 14 monitoring stations.

These stations would test particles down to 10 microns in diameter and test data would be available "in real time" through a government website.