... consistent with the the national approach to economic, environmental and social stewardship.

Sustainable Development - Victoria

The future of the Australian minerals industry is inseparable from the global pursuit of sustainable development. Through the integration of economic progress, responsible social development and effective environmental management, the industry is committed to contributing to the sustained growth and prosperity of current and future generations.  To give practical effect to the industry's commitment to sustainable development, the Australian minerals industry has developed Enduring Value - the Australian Minerals Industry Framework for Sustainable Development.

Enduring Value (EV) aligns with global industry initiatives, and in particular provides critical guidance on the International Council on Mining and Metals (ICMM) Sustainable Development Framework Principles and their application at the operational level.  EV builds on the Australian Minerals Industry Code for Environmental Management - the platform for industry's continual improvement in managing environmental issues since its introduction in 1996.  It provides a vehicle for industry differentiation and leadership, building reputational capital with the community, government and the finance and insurance sectors.  EV also assists the industry to operate in a manner which is attuned to the expectations of the community, and which seeks to maximise the long-term benefits to society that can be achieved through the effective management of Australia's natural resources.


The Victoria minerals industry is not a significant water (surface water and groundwater) user or generator. 2010-11 water consumption by the mining industry in Victoria was just under 10,000ML, which equates to 0.4 per cent of the total water consumption in the state1.  More than 50 per cent of this total allocation relates to dewatering around open cut coal mines in the Latrobe Valley (about 2 per cent of Victoria’s groundwater allocation)2.T he total volume of water entitlements in Victoria are approximately 6,000GL, comprising about 5,366GL surface water and 804GL groundwater entitlements.

Figure 19: Water Consumption 2010-11 - Victoria ML3

In 2011, MCA commissioned URS4 to undertake a review of the relevant Acts, Regulations, Agreements, Policies and Guidelines in relation to mining and water in Victoria, and make recommendations in regards to the key areas for reform to encourage mining and ensure sustainable management of water resources.

The minerals industry in Victoria is currently 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 Primary Industries (DPI),
  • Department of Sustainability and Environment (DSE),
  • Environment Protection Authority (EPA),
  • Catchment Management Authorities (CMA); and
  • Rural Water Authorities (RWA).

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.

MCA Water Accounting Framework

The minerals sector accounts for around 4 per cent of national consumption  with a very high internal rate of water recycling.  Water availability and security of supply is nonetheless a critical business risk for the minerals industry, which generates a very high economic value-add from that use.  The gross value add per GL of water used by mining is $226 million compared with $164 million for manufacturing and $4 million for agriculture.  A study by ACIL Tasman found that the availability of water represents a potential constraint on further investment and expansion of the minerals sector at substantial cost to the industry and broader economy in lost production6.

The MCA has 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.  Through engagement with both State and Commonwealth Governments the MCA has sought to have the framework promoted through the COAG reform processes as an example of how to reduce regulatory burdens, whilst maintaining environmental integrity and driving water use efficiency.

Rehabilitation Bonds

Any company wishing to explore or establish a minerals project must establish a rehabilitation bond with DPI. A rehabilitation bond is a financial security provided by an operator to DPI prior to commencing work.  The purpose of the bond is to ensure that governments financial liability is limited should the operator be unable to meet their obligations to rehabilitate the tenement. Under section 80 of the MRSD Act a licensee must enter into a rehabilitation bond for an amount determined by the Minister.  The operator will recover the bond once the tenement is rehabilitated as required by section 78 or 78A of the MRSD Act.

Table 5: Bond Reviews 2011-127

Bonds reviewed 270
No change 236
Bonds increased 20
Bonds decreased 2
New bonds 12

Figure 20: Rehabilitation Bonds held by DPI at June in each year ($m)8

1 ABS – 4610.0 - Water Account, Australia, 2010-11
2 MCA 2012-13 Pre-Budget Submission.
3 ABS – 4610.0
4 Water Reform in Mining, 2011, URS
5 ABS – 4610.0 - Water Account, Australia, 2010-11.
6 ACIL Tasman, Water Reform and Industry, Prepared for Department of Industry, Tourism and Resources, April 2007.
7 Ibid DPI.
8 DPI Statistical Review reports 2002 to 2011