MINERALS COUNCIL OF AUSTRALIA
VICTORIAN DIVISION
SUBMISSION TO THE REVIEW OF THE STATE
ENVIRONMENT PROTECTION POLICY (WATERS)
17 JULY 2015
TABLE OF CONTENTS
1.
EXECUTIVE SUMMARY ................................................................................................................. 1
2.
INTRODUCTION ............................................................................................................................. 2
The Minerals Council of Australia .................................................................................................... 2
3.
VICTORIAN MINERALS INDUSTRY .............................................................................................. 3
Variety of operations........................................................................................................................ 3
Water use ........................................................................................................................................ 3
4.
MCA WATER POLICY .................................................................................................................... 5
MCA’s water accounting framework ................................................................................................ 6
5.
SEPP (WATERS) ............................................................................................................................ 8
6.
FURTHER REFORMS NEEDED .................................................................................................... 9
Remove regulatory duplication ........................................................................................................ 9
Introduction of net volume water licencing .................................................................................... 10
Whole of government guidance ..................................................................................................... 10
Minerals Council of Australia, Victorian Division
1. EXECUTIVE SUMMARY
The Minerals Council of Australia, Victorian Division (MCA) welcomes the opportunity to submit to the
State Environment Protection Policy (Waters) Review. Water is a critical input to mineral exploration
and development operations. Secure and cost effective access to waters through efficient water
markets and industry water stewardship is a key plank of minerals industry advocacy.
The minerals industry’s water policies and use of advanced measuring and monitoring systems
demonstrates a commitment to leadership in responsible water use.
The MCA has engaged extensively with a range of departments and agencies over the past decade
to ensure that the state’s water policies and regulations are cognisant of the unique circumstances of
the minerals industry. Therefore it is disappointing that the MCA is not represented on the
Stakeholder Reference Committee at this time.
This submission describes the minerals industry’s policy on water management; the challenges faced
as a result of various water policies across a number of regulatory agencies and how they intersect
with the minerals industry. It also identifies areas where further further reform could ensure a robust
but flexible water management regime; and the type of guidance required by the minerals industry.
The key areas for reform are:

reducing regulatory overlap

addressing gaps in legislation, policies and guidelines that relate to water and mining

the provision of a single, whole of government guideline on water and mining

clear leadership amongst regulatory agencies in relation to mining and water.
Minerals Council of Australia, Victorian Division | 1
2. INTRODUCTION
The Minerals Council of Australia
The Minerals Council of Australia is the peak industry organisation representing Australia’s
exploration, mining and minerals processing industry, nationally and internationally in its contribution
to sustainable development and society. The MCA’s strategic objective is to advocate public policy
and operational practice for a world-class industry that is safe, profitable, innovative, and
environmentally and socially responsible attuned to its communities’ needs and expectations.
The Victorian division of the MCA represents the interests of member companies operating, exploring
and providing services to the industry in Victoria. Policy positions of the Victorian industry are one
and the same as the entire Australian minerals industry. The MCA operates on a platform of national
consistency and therefore considers that minerals operations in all jurisdictions should be subject to
the same polices and legislative frameworks.
The MCA has a strong record in establishing leading practice in environmental minerals development.
Members of the MCA have a long standing commitment to sustainable development including the
responsible stewardship of natural resources.
The Victorian minerals industry is not a significant water (surface water and groundwater) user or
generator, however water availability and security of supply is a critical business risk for the industry
as water input is essential to mining and minerals processing and to maintaining safety.
The minerals industry is committed to the responsible use of Australia's water resources.
Minerals Council of Australia, Victorian Division | 2
3. VICTORIAN MINERALS INDUSTRY
Variety of operations
The Victorian minerals industry can be separated into the coal sector and the metalliferous sector.
The metalliferous sector is dominated by a number of operational gold and mineral sands mines.
Operations vary from very small to very large across the industry.
The contribution of Victoria’s minerals sector to the state’s economy was $6.05 billion in 2012/13, or
about 2 per cent of gross state product, making it one of the smallest of the state’s major industries.
The industry paid $41.36m in royalties in 2012/13, of which brown coal royalties was $32.74m.
The minerals industry is also a relatively small employer considering the scale of its economic
contribution with 12,600 people working for the industry (including corporate staff). However, in
regions where the industry has operations it is a major employer and provider of high wage jobs.
Despite its comparatively small size, the minerals industry’s contribution to the Victorian economy is
the largest per employee by a considerable margin with a gross value add per employee is over
1
$760,000.
Exploration and Mining Licence numbers (latest available data)
2
600
Number of licences
500
400
300
Exploration Licence
Mining Licence
200
Total
100
0
Water use
Water availability and security of supply is a critical business risk for the minerals industry.
The industry faces a wide range of water management challenges. These challenges may include
variable and limited water supply, use and treatment of poor quality water, mine dewatering and the
management of excess water.
Minerals operations often install, operate and maintain the infrastructure necessary for their water
supply and in some circumstances the water infrastructure provided and maintained by industry is
shared with other stakeholders, including neighbouring communities, farmers and pastoralists.
Water quantity and quality requirements for mining are predominantly driven by the type of mining, the
specific ore treatment, concentration process or environmental controls for discharge. As a result
water requirements for mining operations tend to be site and operation specific.
1
MCA Victorian Division 2015-16 pre-Budget Submission
Department of State Development, Business and Innovation, Earth Resources Regulation 2012-13 Statistical Report, 2013,
page 11, available online at: http://earthresources.efirst.com.au/product.asp?pID=1131&cID=46&c=15115
2
Minerals Council of Australia, Victorian Division | 3
Water reuse, recycling and ‘fit for purpose’ water practices are well established in the mining industry.
The industry uses a variety of water sources including surface and groundwater, sea water and
treated effluent. Water that can be used by the industry is not always valued by other users.
The minerals industry generates a very high economic value-add from the water it uses, many times
that of other industry sectors.
While the Victorian minerals sector uses a very small amount of the state’s water resources, the
industry can be a significant water user at a local or regional level. In 2012-13 water consumption by
the mining industry in Victoria was slightly under 13,000ml, which equates to 0.3 per cent of the total
3
water consumption in the state. Total water consumption in Victoria for 2012-13 was 4,219gl, which
4
accounted for 21 per cent of the Australian total. The total volume of water entitlements in Victoria
are approximately 7353gl, comprising about 6389gl surface water and 963gl groundwater
5
entitlements. More than 50 per cent of relates to dewatering around open cut coal mines in the
6
Latrobe Valley (about 2 per cent of Victoria’s groundwater allocation).
Water consumption 2012-13 - Victoria ML
3,000,000
7
2,798,957
2,500,000
2,000,000
1,500,000
1,000,000
565,450
500,000
12,848
129,310
229,578
126,210
356,631
0
Agriculture,
Forstry and
Fishing
Mining
Manufacturing Electricity and Water supply,
gas supply sewerage and
drainage
services
Other
industries
Household
3
ABS – 4610.0 - Water Account, Australia, 2012-13
Ibid ABS
Victorian Water Register http://waterregister.vic.gov.au/images/documents/VWA_2013-14_FINAL_WEB.pdf
6
MCA 2012-13 Pre-Budget Submission.
7
ABS – 4610.0 - Water Account, Australia, 2012-13
4
5
Minerals Council of Australia, Victorian Division | 4
4. MCA WATER POLICY
The minerals industry is committed to the responsible use of Australia's water resources.
Accordingly, the industry supports and promotes the following principles with respect to water use and
management.
Water and the minerals industry's social licence to operate:

the minerals industry is committed to the stewardship of natural resource assets, including
water

water is recognised as a key business asset with social, cultural, environmental and
economic values at a local, regional and national level

the minerals industry is committed to active and open engagement with stakeholders
including other water users within regions to support regional economic development and
diversity and to maximise beneficial re-use of recycled or surplus water

the rights and interests of Indigenous Australians to lands and waters, including access for
cultural purposes are recognised and supported.
Water planning and reform priorities:

the minerals industry strongly supports the principles contained within the 2004
Intergovernmental Agreement on a National Water Initiative and implementation of the
national water reform agenda

all water planning and management decisions should be based on sound science and
stakeholder engagement, be transparent and have agreed and reasonable timeframes for
review

cultural and environmental water flows should be quantified and secured prior to determining
the quantity available for consumptive use

industrial users should be included in water resource planning to provide opportunities for
maximising economic, social and environmental outcomes

the minerals industry makes significant investment in research, monitoring and management
of water resources; this knowledge should be incorporated into water sharing planning
processes

strategic land use assessment and planning should take account of future water needs and
ensure infrastructure is in place to meet those demands

the integration of mining operations into water sharing planning processes, ‘fit for purpose’
entitlements and accounting for the regulatory framework in which the industry operates
should be priorities for the national water reform process

in the absence of a fully functioning water market, clause 34 of the National Water Initiative
should be retained to account for the development of suitable transitional arrangements,
sector specific challenges, regulatory regimes and market or structural adjustments which the
industry faces.
Access arrangements and pricing:

the price of water should reflect demand, source and quality, rather than being predetermined based on its end use

the effective operation of a national water market should not be limited by the application of
any sector based subsidies or rebates, or artificial barriers or impediments to trade

water pricing should incorporate the full cost of capturing, storing, treating, distributing and
managing water and be discounted where industry has invested in public water infrastructure,
Minerals Council of Australia, Victorian Division | 5
planning and management requirements. Alternatively, industry should be able to sell any
water savings generated through its investment in infrastructure and efficient water
management

access arrangements should be ‘fit for purpose’, recognising that a 'consumptive pool' model
may not be the most efficient model for diverse geographical regions and users across
Australia.
Regulatory barriers:

as an economically important user of water, the industry is heavily regulated and the
intersection of those regulatory frameworks and the water reform process needs to be
appropriately recognised, understood and equitably reconciled by governments

any regulatory measures being developed by authorities must be equitably applied to all
water users, such that they do not represent an unfair barrier for industry-specific access to
water markets.
Surplus water management and beneficial use:

the holding of surplus water in ‘fit for purpose’ storage facilities should be managed on the
basis of risk to health and safety and the environment

under certain circumstances, the controlled release of water presents a viable option for
reducing safety and environmental risks associated with extreme weather events and
infrastructure failure

regulatory mechanisms should allow for flexibility in the management of surplus water
including on-selling, beneficial use, managed aquifer recharge and a risk based approaches
to water release.
MCA’s water accounting framework
The minerals industry invests heavily in the development and application of innovative and
sophisticated technologies in management systems, recovery, recycling and beneficial use and reuse of waters. The industry has also been at the forefront of adopting a risk management approach
to ensure that climate variability is factored into water management planning.
A reliable and consistent data set across all water users is an essential basis for good policy and
effective resource management. The water accounting framework, developed by the minerals
industry, has made significant advances in achieving this aim. While reliable and consistent data is
important for regulatory confidence, datasets need to add both value for business and be meaningful
to external stakeholders.
Many minerals operations and companies have water accounting systems in place to measure,
monitor and report water use. However these systems are often not consistent across companies or
even operations. This can make understanding industry water use by company or region and crosssectoral comparisons difficult.
The MCA led a landmark effort to better understand the industry’s water use (and future needs)
through the development of a water accounting framework to serve as a one-stop-shop for water
information for industry stakeholders.
8
The MCA Water Accounting Framework (WAF) has been designed to allow sites to account for,
report on, and compare site water management practices in a rigorous, consistent and transparent
manner that can be easily understood. It has also been designed to align with the international Global
Reporting Initiative (GRI) and the recently developed Australian Water Accounting Standard (AWAS).
The main use of the WAF is to account/quantify water flows by source and destination.
8
Minerals Council of Australia, Water Accounting Framework, 2014, available online at:
http://www.minerals.org.au/focus/sustainable_development/water_accounting
Minerals Council of Australia, Victorian Division | 6
The input-output model accounts the volume of water that enters a site (e.g. ground water, surface
water, town water etc.) and how much is discharged from the site. The model enables companies to
align metrics and report on water use and discharge in a consistent way. Key to the model is a set of
standard definitions for both water ‘source’ and ‘destination’ categories.
In 2011, MCA member companies committed to align company water metrics consistent with the
Water Accounting Framework input-output model.
A standardised approach to assigning a water quality category to each input and output has been
developed for use with the Water Accounting Framework. The purpose of the categories is to create
uniformity amongst companies in how water quality is described. The criteria have been chosen to
correlate with what the public may consider to be high quality water (category 1) and low quality water
(category 3) and the ‘level of treatment effort’ required to achieve a standard fit for human
consumption (as a ‘universal benchmark’ to guide the categorisation process not reflect end use).
In 2013, MCA member companies committed to the second component of WAF (adoption of standard
categories for water quality) for implementation by mid-2016.
Minerals Council of Australia, Victorian Division | 7
5. SEPP (WATERS)
The requirements of the existing SEPPs (Waters of Victoria) and (Groundwaters of Victoria) are
considered onerous with respect to application to mineral operations, specifically turbidity and some
other water quality objectives.
A critical component of implementing requirements is the need to acquire accurate information on
water use, availability and sustainable diversion or extraction within catchments or groundwater
management areas. In many areas, the most basic information is not known.
Both the minerals industry and regulators have expressed concerns with inconsistency in the
application of water requirements for miners within and across regulatory agencies. Specifically, that
either the different agencies have competing priorities with respect to water management or that there
is a different approach to the same issue in different areas of the State. Specific examples of these
issues are as follows:

inconsistent requirements in relation to allowing stormwater run-off to discharge off-site (i.e.
disallowing discharge at Bendigo, and allowing discharge in Latrobe Valley)

the conflict with the rigorous (and potentially commercially unviable) requirements to treat
groundwater collected for dewatering and discharge to the local surface water environment,
with the need to maintain or increase surface water flows within the catchment

inconsistent application of the SEPP (WoV) in relation to water quality objectives.
Consolidating both SEPPs into one document has merit and will ensure a single set of policy
principles and water quality objectives referenced from the Environment Protection Act 1970 rather
than the existing additional set of principles. As with any consolidation exercise it is important that
unique circumstances of beneficial users can be accommodated as well as sufficient flexibility when
applying the SEPP.
The current review provides an opportunity to develop greater coordination processes within and
between agencies to improve the consistency of application of policies and guidelines.
There is a need for the earth resources regulator and the mining industry to be able to access key
expertise within Environment Protection Authority (not necessarily the operational officers they deal
with on a day to day basis) with respect to water. This will clarify the requirements and reduce the
variability in interpretation and implementation within and between agencies.
The minerals industry has long advocated for triple bottom line policies and decision making
processes. The inclusion of these principles in the objective of the SEPP is strongly supported. The
minerals industry is a high value water user and acknowledging that beneficial uses of water may be
economically or socially desirable is critical to water policy. There will, however, always be challenges
for decision makers in balancing these objectives.
Minerals Council of Australia, Victorian Division | 8
6. FURTHER REFORMS NEEDED
Remove regulatory duplication
The minerals industry in Victoria is required to comply with a wide range of water policy and
regulatory tools which are managed by a number of government agencies, including:
• Department of Economic Development, Jobs, Transport and Resources (DEDJTR)
• Department of Environment, Land, Water and Planning (DELWP)
• Environment Protection Authority (EPA)
• Catchment Management Authorities (CMA)
• Rural Water Corporations (RWC).
Sections 13 to 38 Mineral Resources (Sustainable Development) Act (MR(SD) Act outline exploration
and mining licences. The holder of a mining licence (who obtains a work authority) is able to construct
any facilities specified in the licence including tailings dams, water races,
reservoirs,
pipelines and drains, and anything that is incidental to mining (on the land covered by the licence):
Section 26-2(c) states that the minister may impose conditions on a licence to protect the environment
or groundwater.
Section 40 states that a licensee that proposes to do work must lodge a work plan to the department
head. The work plan, amongst other things, will describe the management of water on-site. A work
plan may be approved with site specific conditions in relation to water management; and
Section 44 states the licensee must seek the permission of the Water Authority (under the Water Act
1989) which manages the land on which the mining is to take place.
There is a clear overlap with the provisions of the MRSD Act in the licencing of on-site water
collection and storage dams, licensing of dewatering and underground disposal by means of a bore.
These include the requirement for licences to access and use surface or groundwater, as well as
approval to construct dams, discharge water off-site and discharge of water to an aquifer. Some of
these requirements are subject to area or catchment based plans, prepared to manage the resource.
On-site (i.e. within a mineral licence area) management of water, including construction of water
related works, distribution, treatment and on-site disposal (e.g. tailing storage facility, evaporation
pond) are reviewed and approved by DEDJTR. Management plans may contain conditions in relation
to water management, surface water or groundwater protection.
A holistic assessment of the regulatory overlap between the Water Act 1989, the MR(SD) Act and the
Environment Protection Act 1970 is required to minimise the regulatory burden on industry.
The specific areas of regulatory overlap relate to the discharge of mine ‘wastes’ to surface water and
groundwater and are:
1. Miners require a works authority from DEDJTR for land based discharges and a works
approval/licence from EPA for discharges to water (off-site)
2. If disposing waste by groundwater recharge (eg. groundwater dewatered from around a mine
is recharged into an aquifer), a licence from both EPA and the water authority is necessary.
Both agencies would have used the current SEPP (Groundwaters of Victoria) to assess
whether the discharge was appropriate.
The overlap is highlighted where the ‘waste’ being ‘disposed’ is groundwater that is being removed
close to a mine and injected to the same aquifer away from the mine.
Minerals Council of Australia, Victorian Division | 9
Both of these areas of regulatory overlaps could be resolved by an amendment to the scheduled
premises and exemptions regulations exempting these activities from an EPA works approval /
licence where an approval under the MRSD Act or Water Act is in place.
Introduction of net volume water licencing
The MCA encourages the government to further assess the potential for Net Volume Water Licensing
(NVWL) for the minerals industry.
The MCA participated in a research project commissioned by the former Departments of
Sustainability and Environment and Primary Industry on the potential for Net Volume Licensing of
9
Water Use in the minerals industry.
The minerals industry is unique in that the decision to operate a business is predetermined by the
geology. Most of Victoria’s rivers and aquifers are already fully allocated or reaching full allocation. In
areas where groundwater licences are fully allocated this prohibits the further development of the
minerals industry. To ensure that Victoria can maximise its economic potential through the extraction
of mineral resources, a new approach to water licencing is required for the minerals industry. NVWL
enables flexibility whilst not increasing the consumption of water.
The benefit of net volume licensing is that an authority to authorises access to water on the basis of
‘net use’ rather than ‘the gross volume taken’ more accurately reflects the consumption of water and
therefore the actual draw down from a water system.
A take and use licence could be granted for a volume that is equal to the volume extracted, with a
return volume specified as a licence condition. Alternately, the licence volume can be specified as the
net water use.
To provide the RWCs with confidence that an applicant understands the inputs and outputs of water
to and around a site, the MCA’s Water Accounting Framework accurately accounts for use, reuse and
discharge of water.
The minerals industry is regulated under the MR(SD) Act. Prior to any activities occurring an
assessment is required of all impacts to the environment, including water resources, and techniques
to manage any adverse impacts. Rural water corporations are referral authorities under the MR(SD)
Act.
To remove regulatory duplication RWCs could be authorised to licence water used for projects
approved under the MR(SD) Act based on net water use.
A number of conceptual models were investigated and applied on a range of mineral sites and the
report concluded that the minerals industry is an excellent candidate for NVWL arrangements as:

site inputs and outputs (including appropriate accuracy of information) are well understood

the location of site inputs and outputs are often the same (extraction and release of water
occur from and to the same source)

the timing of extraction and discharge can be managed to minimise impact on the water
resource and third parties

the quality of outputs is compatible with the quality of receiving resources.
MCA recommends that the government develop a system that allows for net volume water licencing
as an appropriate and robust way to manage the water consumed by the minerals industry.
Whole of government guidance
Both the mining industry and regulators agree there is inconsistency in the application of water
requirements for miners within and across regulatory agencies. In specific terms, it is clear that
9
Net Volume Licensing of Water Use – Report, May 2013, www.globalskm.com
Minerals Council of Australia, Victorian Division | 10
different agencies have competing agendas with respect to water management or that there was a
different approach to the same issue in different areas of the state.
In short, there is no single guidance document for the minerals industry in relation to water, with a
range of agencies having published water related guidance for the mining and extractive industries.
The MCA has long requested this guidance, which would also outline the roles and responsibilities of
each agency and incorporate a hierarchy of agencies, policies and guidelines.
Currently, each agency provides its own guidance to the mining industry in relation to water.
The current DEDJTR guidelines: Management of Water in Mines and Quarries (2002) aims to
summarise the key purposes and linkages between the legislation and does provide basic direction
on the management of discharges of water from a mine site to ensure compliance with Victorian
legislation and promotes the reuse and conservation of water. It is also a basic summary of the
Victorian legal and policy requirements, but does not provide a clear outline of approval process.
Furthermore, the guidelines predate the water policy reform, the variation of the SEPP (Waters of
Victoria), (June 2003), and the development of the National Guidelines on Managed Aquifer
Recharge.
Other regulatory agencies provide their own guidance for water related issues, DELWP and EPA
having water related guidance for the mining and extractive industries
The industry and regulators would be assisted by the preparation of a single interagency document
that outlines water related requirements and guidance. The guidelines should nominate one key
agency which would deal directly with the industry and regulators and ensure consistency of
implementation of policies and guidance with respect to water and mining. The guidance should also
outline the roles and responsibilities of each agency and incorporate a hierarchy of agencies policies
and guidelines.
An excellent example of industry wide guidance is the ‘Western Australian water in mining guideline
10
released in 2013. This guideline sets out how to meet the WA Department of Water’s regulatory
requirements for mining projects and provides advice on water management issues that need to be
considered in mine planning and the type of information the department may require as part of the
licence assessment process.
The guideline has also been developed to improve knowledge on regulatory processes across the
state government agencies, relating to water in mining proposals. A key objective of this guideline is
to provide guidance on the nature of issues that may need to be addressed through an assessment
process, and assist mining companies with the regulatory process.
The MCA encourages the government to work with the minerals industry to develop a similar
guideline.
10
Water licensing delivery series, Report no. 12, WA Department of Water
Minerals Council of Australia, Victorian Division | 11