The majority of the coal mined at Takitimu was used by Fonterra to dehydrate milk for export at the Clandeboye factory.
Bathurst Resources, which owns the mine, is planning an expansion into a nearby forestry block owned by Southland District Council.
The Government had declared a climate emergency in 2020, but had not yet committed to closing coal mines or giving coal workers the option of ''good clean jobs'' instead, spokesperson Kennedy said.
Protester Gemma Marnane, whose family has worked in the mining industry in Nightcaps for generations, said it was time to appreciate coal as a part of New Zealand's history not past.
"We are afraid for the future and uncertain what it looks like, but we can build a new, positive vision together," Marnane said.
Climate activist Adam Currie said the emissions from the coal mined at the Takitimu coal mine were equivalent to the emissions from 110 million cars.
A judicial review of the Southland District Council's decision to grant permission for the expansion is being sought by Forest and Bird and will be heard on July 18.
They are seeking the review on the grounds that the council failed to factor in climate change into its decision to grant exploratory access to its forestry block, Currie said.
Police at the scene were blocking exits and entrances, including to media, Currie said.
An Otago Daily Times reporter at the scene said protesters had been informed they were trespassing by locals, but had not yet received a formal trespass notice.
Police were having undertaking talks with protesters, the reporter said.
