On Wednesday, Rural Fire Service, after its investigation, confirmed that a military explosive set during an exercise had started the blaze across Blue Mountains.

The next day, Oct 24, acting Minister for Defence Senator George Brandis released a statement about the RFS State Mine Fire investigation.

The Defence Department acknowledged that indeed, an exercise on Marangaroo Defence range on Wednesday, Oct 16, 2013 may have caused the State Mine fire near Lithgow.

However, Defence Department neither denies nor confirms what RFS's had found out after its investigation.

The department stated that they are fully cooperating with the New South Wales police in conducting further investigation.

"I have seen reports that the State Mine fire near Lithgow may have been caused by live ordnance exercises on Marangaroo Defence Range on Wednesday 16 October 2013. Last night I spoke to the Acting Chief of the Defence Force, Air Marshal Mark Binskin, about the matter.The Australian Government and the Australian Defence Force take this issue very seriously and continue to fully cooperate with the New South Wales authorities, including the New South Wales Police, who are investigating the fire," Mr Brandis stated.

Rest assured, the Defence Department is doing its best to help the Australian Government during this challenging time.

"Our thoughts and prayers are with the people of New South Wales who have been affected by these devastating fires and the Australian Government is doing everything it can to help the New South Wales authorities bring the fires under control," Mr Brandis added.

Meanwhile, an aircraft crashed on the NSW south coast as it performs its duty in firefighting operations. The incident started another bushfire that poses challenged for rescuers to save the pilot.

There was a 3,800-hectare bushfire burning out-of-control in a bushland at Wirritin Ridge, 36 kilometres west of Ulladulla, RFS stated. The aircraft was waterbombing the blaze before it crashed.

RFS expressed "grave concerns" about the life of the pilot. RFS Deputy Commissioner Rob Rodgers said that the M-18 Dromader was contracted to the RFS for its firefighting operations.

"We are concerned, as you would imagine. Until such time as we have any confirmation of anything, the condition is unknown. All I can tell you about that is that I can confirm there was a fixed-wing bomber working on fires down in the Ulladulla area. That aircraft has crashed," Mr Rodgers told The Sydney Morning Herald.

There were already two rescue helicopters attempting to rescue the pilot, but high winds and smoke around the area had prevented all efforts for rescue.

Mr Rodgers said firefighting was "an inherently dangerous task, whether you are on the ground or whether you are flying the air".

"Our focus right now is obviously supporting the families involved and making sure the best possible services are provided to go in and hopefully help the pilot," Mr Rodgers added.

''At this stage it is believed that the pilot was the only person on board and it it is confirmed the aircraft was contracted to the NSW Rural Fire Service. NSW Police Aviation Command is heading to the scene with an air crash investigation officer who will liaise with Air Transport Safety Bureau investigators," a NSW Police spokesman said.