Morwell residents are shocked an arsonist is behind the blaze which has cloaked the Victorian town in thick smoke.
Police say the fire in the Hazelwood open-cut coal mine is the work of a calculated firebug.
The blaze has covered Morwell with thick smoke and ash since February 9 and is expected to take at least another fortnight to put out.
Sharon Dale, who works in Morwell, said she was appalled to learn an arsonist was at work.
"It's just disgusting. I don't see what they get out of it," she told AAP.
"There's so many people that sick from it now, and the smoke and the fumes. It's just really bad.
"It's the smell of the coal, that's the worst thing."
Long-time Morwell resident Howard Williams says there has been a string of fires in the same area and locals believe they know who the firebug is.
"An arsonist and a fire's a terrible thing and we're very fortunate there was no loss of life and limited loss of private property," he told AAP.
"There are people who live in the region who believe they know who it is.
"But there's a big difference between that and having enough evidence to take action."
Mr Williams says the blaze is creating a significant health issue but many people in the town's south are stuck there.
"There are many people in the south of Morwell who don't have masks, don't have the ability to get in a car and drive away," he said.
"For the health department to say that this is a short-term exposure ignores the fact the people who live in the Latrobe Valley are exposed to these foreign particles on a daily basis all their lives.
"They don't need to have a supercharged dose for a month or so just to top it off."
Andrea Camier, who lives within a kilometre of the fire, was disappointed to learn a firebug sparked the blaze.
"I cannot understand what you gain through doing something as terrible as that to affect so many people's lives," she said.
"Last night it was really awful, a very, very strong smell and very strong smoke, thick smoke."
