An independent University of Newcastle study saw a male and female koala 96 metres apart on August 30 and the male was heard bellowing, which is a key behaviour in the mating season. Another male koala, who was also heard bellowing, was detected not far away.

Dr Ryan Witt and Associate Professor John Clulow also found the 52 hectares earmarked for clearing to facilitate the expansion was actually better habitat than the rest of the quarry land.

They also noticed it provided a vital east-west link with adjoining high-quality habitat.

The experts concluded there was a high likelihood that healthy male and female koalas are at the site and are likely to be breeding.

"It is our view that the development will have significant impact on the koala and critical koala habitat in NSW," the report said.

"We believe this project will have a negative impact on the remaining koalas in NSW, and the potential impact of the development should be considered in the context of the current declining status of koalas in NSW."

A spokesman for Ms Ley told The Mercury the experts' report and the survey methods used for relevant threatened species during the application process would be considered as part of the assessment.

Read more: Bid to save koalas from quarry expansion

Read more: Expert calls for updated koala data

He noted the federal government had asked quarry owner Hanson to undertake an additional assessment in June following the horror summer bushfires. That report looked at whether the bushfires has exacerbated the impact the expansion would have on certain species, including the koala.

"The decision will take all relevant matters into consideration, including the assessment report, issues raised in the public submissions made during the assessment process, and relevant social and economic impacts," he said.

"The decision will also take into account all relevant impacts on the koala including the impacts of the 2019-2020 bushfires."

The federal government has been aware of the project since 2015 when it was referred under the Environment Protection and Biodiversity Conservation Act.

Hanson wants to expand the quarry so it can lift production from 700 tonnes to 1.5 million tonnes per year. It says the project is vital to the quarry's existence and noted it was running out of rock in the current area.

Brandy Hill and Seaham Action Group raised the money to pay for the independent survey.

"It should not be possible to approve a project that will have a significant impact on a threatened species on the basis of data collected in 2014 and before planning instruments have been updated to take into account the fact that koalas in NSW are set to be extinct by 2050," resident Chantal Parslow Redman said.