The NSW Environmental Protection Authority fined Newcrest Mining's Cadia Valley Operations gold mine near Orange $15,000 for dust pollution in April, 2022.
On Monday, the EPA said in a statement that it had launched another investigation into the site, issuing a draft pollution prevention notice as well as a draft licence variation covering the management of emissions of dust and other pollutants.
It has also written to the NSW chief health officer requesting a full health risk analysis be carried out to determine if mine dust was impacting the health of the community.
EPA chief executive Tony Chappel said Australian industry had a moral and legal obligation to limit its impact on communities.
"Everyone in NSW has a right to clean air no matter where they live," he said.
"Industry has strict obligations to meet clean air standards and currently Cadia appears to be falling well short of our expectations."
Last week, the EPA received new evidence from the community suggesting actions by the mine to reduce dust pollution had not been effective.
"Understandably, this community needs answers and so too does the EPA," Mr Chappel said.
The EPA has ordered the re-testing of the mine's main vent and an extension of the ambient air sampling network to deliver expanded air monitoring.
It will host a community drop-in session in Millthorpe on Tuesday to address locals' concerns.
The draft licence variation includes requirements to carry out an independent health risk assessment with NSW Health and deploy a sensor network for real-time monitoring.
A report will also be released on "dust fingerprinting" to identify the contributions of dust at locations identified by the local community, including analysis from the the Australian Nuclear Science and Technology Organisation.
A specialist will interpret results from lead isotope testing to identify the source of lead found in water tank sludge and develop an effective sampling methodology for vent shafts within the mine operations area.
Locals will also be offered household water tank cleaning and filling.
Last year's investigation by NSW Health found contaminants in the local community's tap water, including copper, lead, nickel and zinc, were within Australian guidelines and the water was safe to drink.
Cadia has until May 23 to respond to the latest concerns.
