Peabody Energy has locked out workers at the United Wambo Washery, escalating an enterprise agreement dispute that has been ongoing since early May.
Workers had been taking protected industrial action after overwhelmingly rejecting the company's latest offer.
The Mining and Energy Union said the offer, which included annual wage increases of 2.5 per cent and cuts to bonus arrangements, fell short of outcomes being achieved elsewhere in the coal industry.
"There's very little between the parties and this dispute could have been settled weeks ago. Instead, Peabody has chosen to lock out its own workforce for two weeks," Mining and Energy Union Northern Mining and NSW Energy District President Robin Williams said.
"Instead of reaching an agreement, they've chosen to shut workers out of their workplace and put additional pressure on local families."
Mr Williams said members remained willing to negotiate.
"Our members remain united and ready to reach a fair agreement. The question is whether Peabody is," he said.
In a statement, Peabody said the company had notified employees of a two-week lockout in response to ongoing protected industrial action by members of the Mining and Energy Union under the Fair Work Act.
This followed an extended period of enterprise agreement negotiations, including multiple formal bargaining meetings, which were yet to result in a mutually acceptable outcome.
"Over a period of seven weeks, the site has experienced ongoing protected industrial action, including work stoppages and partial work bans. The lockout applies to employees participating in this industrial action," a spokesman said.
He said the company's latest offer would continue to place employees among the highest paid in the region.
"Peabody remains committed to reaching a resolution that supports employees and enables a safe, stable and productive operation," the spokesman said.
"Despite the employee action, the plant continues to meet its contractual requirements."
