Kaitangata deputy fire chief Dwayne Thompson said workers at the site had noticed an odour and they were evacuated.
A Fire and Emergency New Zealand (Fenz) spokesman initially said they were called to an Eddystone St address about 12.15pm.
However, an Otago Daily Times photographer at the scene said fire crews were assembled in Berry St, near the Kai Point Coal mine.
Kaitangata, Balclutha and St Kilda fire crews were in attendance at the mine, along with a command unit from Dunedin, Mr Thompson said.
The Balclutha crew had a gas detector, he said.
A very low concentration of methane had been detected.
He expected it could have come from a seam of coal that could have been hit.
Firefighters were assessing what they were dealing with, he said.
Residents in the area were safe inside their houses, he said.
Several of the staff at the site were earlier reported as feeling unwell.
