The NSW Department of Planning issued the ultimatum in a letter to Gunlake Quarries.

Gunlake wants to expand its Brayton Rd, Marulan, quarry from 750,000 to two million tonnes annually.

The plan has met stiff resistance from Marulan district residents, angry about the proposed 440 trucks along the haul route daily. It's an increase of 276 vehicles but the company has also flagged a maximum 690 trucks daily.

The issue was a hot topic at a public meeting at Marulan late last month, which some 50 people attended.

The Department called the meeting in response to 49 public submissions on the plan, the majority of those objecting.

"The Department has reviewed all submissions and notes that the community's principal concerns relate to noise, dust, impacts associated with the proposed increase in truck numbers and the lack of detailed consideration of the potential for transporting quarry products by rail," director of resource assessments, Howard Reed wrote.

He stated that although Gunlake had undertaken some analysis of road versus rail, it hadn't provided a detailed assessment of rail options. In addition, it had not approached Holcim about using its rail infrastructure at the Lynwood Quarry.

This was a key point raised in several residents' objections.

The Department wants a comprehensive cost benefit assessment of road versus rail; including "external" factors like traffic congestion, carbon emissions and road accidents.

It has also asked Gunlake to re-examine the proposed increase in truck movements, demonstrating that it has done everything possible to reduce impacts, including noise.

In response to residents' concerns about operational noise, particularly from an open crusher, the Department said the EIS hadn't given "sufficient attention" to the full range of potential mitigation measures.

The State's response is music to the Towrang and Marulan district community's ears.

Towrang man Geoff Pearson said people at the meeting were happy with the State's stance. "Twenty to 30 years ago a developer would have had carte blanche," he said. "Now the Department is taking our concerns seriously and listening, and that's really what it's all about.

"The community is not against quarries and economic development. This is about maximising the mitigation measures and reducing the impact on the community and environment."

Mr Pearson said the meeting's purpose was to outline the planning process and allow people to raise concerns. He described the mood as "respectful but resolute."

The Department will prepare a report on the $3.25 million project after Gunlake has responded to issues raised in submission. It will make a recommendation to the Planning Assessment Commission (PAC), which will decide the expansion following a hearing in Marulan.

The PAC can request independent consultants reports if necessary.

Even at Towrang, 8km from the quarry, Mr Pearson says he can currently hear Gunlake's crusher. Like other objectors, he's called on the company to enclose the crusher in the expanded operation.

He questioned why Gunlake wasn't being held to the same standard as Holcim, which he said had demonstrated genuine community consultation.

"Holcim worked with us very closely on mitigation measures when they wanted to build their second pit (at the Lynwood quarry)," he said.

"They satisfied everyone's requirements so that when the DA went in, they only received one submission. Gunlake's attracted 49. What does that tell you?"

Mr Pearson maintained company managing director Ed O'Neil did not acknowledge community concerns at the meeting, which was "disappointing".

He described a Community Consultative Committee as "a joke" and called on the company to spend money on necessary infrastructure rather than doing the project "on the cheap".

"There is a solution but it requires some real capital expenditure," he said.