NSW Labor has backed the establishment of a container terminal at the Port of Newcastle.
Opposition Leader Chris Minns said the project was essential for local jobs and the economic diversification for the region.
It follows similar comments from Prime Minister Anthony Albanese in January regarding the need to diversify the port's operations.
It is estimated a Newcastle Deepwater Container Terminal would generate more than 15,000 direct and indirect jobs and contribute $2.5 billion to the national economy.
It is also estimated the project would attract $1.8 billion in private investment.
But Port Commitment Deeds, which were signed when Port Kembla and Port Botany were privatised in 2013, require the state to compensate those ports if container traffic at the Port of Newcastle exceeds a cap.
When the Port of Newcastle was privatised in 2014, another deed required that port's operators to reimburse the government for any compensation paid to the operators of Kembla and Botany.
The Newcastle Herald revealed Tuesday that the State Government's opposition to the Newcastle container terminal was among the arguments used to dump a scheduled announcement regarding the allocation of $250million in federal funding for early infrastructure works.
NSW Minerals Council chief executive Stephen Galilee denied the council had played a role in having the announcement, that was scheduled for May 6, cancelled.
"We have argued that the port should be regulated so that users of the port are protected because it is a monopoly. Whether those users are us or anybody else it doesn't matter," Mr Galilee told the Herald.
"We have an open mind about the container terminal, just like we have an open mind about the submarine base or a hydrogen hub.
"We support a strong and diverse economy and a strong and diverse port. But as the major users of the port we feel vulnerable and unprotected because it is an unregulated monopoly."
The High Court ruled in December that the Port of Newcastle's pricing structure was valid. It brought to an end an estimated $50million in court action between the port and the mining industry.
A Port of Newcastle spokesman challenged the Minerals Council to actively support the container terminal.
"Whilst the Minerals Council indicate that they are not opposed to the project, the rest of the Hunter business community is strongly in support of the project," the spokesman said.
"Our community survey also showed that more than 80 per cent were strongly in support of the project and benefits the project would bring for the Hunter. We would welcome the Minerals Council coming out and actively supporting this project which would mean we would have almost universal support for this significant diversification step for the Hunter Region."
Opposition Leader Chris Minns called on the government to allow the container terminal to proceed.
"This mess is entirely the result of a failed privatisation agenda by the Liberal government. They signed taxpayers up to a deal that the ACCC found was anti-competitive and now have to deal with the consequences."
Newcastle MP Tim Crakanthorp said the government had adopted a "pig headed" attitude towards the container terminal.
"Every step of the way their position on diversifying the Port of Newcastle has been based on self-interest, self-protection and their privatisation ideology," he said.
"If they'd like to do a good thing for Newcastle before they get voted out in 2023 they should fix it now rather than make it someone else's problem."
