A man is facing more charges over the death of a diver who was found in the water at the Port of Newcastle near 54 kilograms of cocaine.

Police believe the 31-year-old Brazilian national Bruno Borges Martins was a drug mule who drowned while trying to retrieve about $20 million of bricks of cocaine from a ship or the ocean floor in May.

The State Crime Command’s Organised Crime Squad established Strike Force Groove to investigate, with help from the Australian Federal Police, Australian Border Force, Northern Territory Police and Queensland Police.

Strike force detectives and ABF officers arrested a 62-year-old man on Tuesday at Grafton jail and charged him with manslaughter, two counts of people smuggling, and knowingly dealing with the proceeds of crime.

Police will allege the man engaged in unlawful activity which resulted in the death of Mr Martins.

It is further alleged the man illegally smuggled Mr Martins and an associate into Australia from Indonesia.

The man was remanded in custody and will appear at Downing Centre Local Court on October 5.

The man was already in custody after being charged in May over his alleged role in the incident and remains before the courts

Investigations under Strike Force Groove continue.

– AAP