Australia: Groundwater extraction in mining: Government puts a plug on unlimited right to take water

Last Updated: 19 September 2016
Article by Martin Klapper

The Queensland Government has introduced legislation into Parliament which, if passed, will tighten environmental laws regulating the taking of groundwater for mining activities by resource proponents.

In this alert, Partner Martin Klapper and Law Graduate Ruby Rayner consider what the Environmental Protection (Underground Water Management) and Other Legislation Amendment Bill 2016 (the Bill) means for resource companies.

Key Points

  • Proponents must carefully consider the water requirements for their resources projects, and identify whether or not the project requires a water licence under existing legislation. If a resources project requires a water licence, but one has not been obtained before the commencement of the new laws (expected December of this year), the project will be required to obtain an additional "associated water licence", or submit to significant new environmental assessments. These new requirements may have significant impacts on project delivery.
  • New mining and petroleum projects will be required to include specific information about environmental impacts of the exercise of underground water rights in an underground water impact report (UWI Report) as a component of site-specific Environmental Authority (EA) applications lodged or amended after the commencement of the new law. An EA may be amended in response to the content of an UWI Report.
  • Mining projects that have completed, or partially completed, the EA application process will need to apply for a separate "associated water licence", which will involve an environmental impact test and a public submission process, before "underground water rights" introduced by section 334ZP of the Water Reform and Other Legislation Amendment Act 2014 (Qld) (WROL Act) can be exercised.
  • The Bill will amend the "make good" provisions of the Water Act 2000, requiring resource proponents to pay the landholder's reasonable costs in engaging a hydrogeologist for the purposes of negotiating a make good agreement.

Ultimately, we expect that the new laws will add an additional approval process for all projects, not only for major projects.1 Except in limited circumstances, the amendments will affect all projects that have applied for, or obtained, an environmental authority, but that have not yet secured a water licence for the project as at the date of commencement of the new Act.

The new legislation will also empower the Department of Environment and Heritage Protection to amend environmental authorities of all mining projects. These changes mean that medium and small scale mining projects will also be affected.

Water entitlements in Queensland

In Queensland, all rights to the use, flow and control of water is vested in the State.2 Resource proponents may only use, control or interfere with the flow of certain water in a regulated area if it has a water entitlement, such as a licence, under legislation. Where water allocations for a particular area are exhausted, resource proponents may apply for a water entitlement from a state water reserve.

In 2014, a new water right for resource projects under the Mineral Resources Act 1989 (the MR Act) was introduced by the WROL Act. These provisions have not commenced, but are expected to do so later this year.

The new water entitlement allows the holder of a mining lease to take or interfere with underground water if the taking of interference occurs in the course of, or as a result of, the carrying out of an authorised activity under the resource authority. Water taken for these activities is "associated water".

The two examples of permitted use of "associated water" are:

  • mine dewatering of underground water to the extent necessary to achieve safe operating conditions in the mine; or
  • taking underground water as a result of evaporation from an open mine pit.

The Queensland Government has asserted that introduction of entitlements to use "associated water" in 2014 has resulted in "widespread concern" that resource companies will be given an "unlimited right to take"3 groundwater for mining.

Accordingly, the Government has introduced a raft of amendments to the Environmental Protection Act 1994 (EP Act), the MR Act and the Water Act 2000. The amendments are targeted at introducing more stringent environmental assessments to water use and impacts by resources projects.

If passed by the Queensland Parliament, these changes are expected to commence in December 2016.

Implications for new environmental authority applications

The Bill proposes amendments to the EP Act which will introduce new requirements for site-specific environmental authority applications for projects that seek to exercise underground water rights for a "resource project" or "resource activity" under a mineral development licence, a mining lease, or a petroleum licence.

Under the new law, site-specific environmental authority applications must include detailed hydrogeological information, including:

  • identification of each aquifer affected, or likely to be affected by the project;
  • details of the hydrology of the underground water; and
  • an assessment of the impacts on environmental values and water quality that may be affected by the exercise of underground water rights.

The lodgement of amendment application for a site-specific EA application after the commencement of the new laws will also trigger the new requirements, regardless of when the application was lodged.

Transitional provisions – associated water licences

Resource proponents will only be able to exercise the entitlement to use "associated water" under the MR Act once they have obtained an "associated water licence".

The application process for an associated water licence will involve significant additional assessment of environmental impacts during the EA application process. This information will be notified to the public and subject to submissions, third party objections, review and appeal rights. The chief executive may decide to refuse or grant the application, and impose conditions relating to the exercise of underground water rights, such as the requirement to carry out a management strategy or undertake a baseline assessment.

In certain circumstances, the new requirement will also apply to projects notified as co-ordinated projects under the State Development and Public Works Organisation Act 1971.

The new Bill proposes to amend a raft of legislation including the Environmental Protection Act 1994, the Mineral Resources Act 1989, the Water Act 2000, and the Heritage Protection Act 1992.

If passed by the Queensland Parliament, these changes are expected to commence in December 2016.


The Bill was tabled in parliament yesterday and has been referred to the Agriculture and Environment Committee for detailed consideration. The Agriculture and Environment Committee will commence an enquiry into the Bill which will likely involve a call for public submissions. Interested stakeholders should monitor these developments and consider preparing a submission to the Committee.


1 Michael McKenna, ' Tougher water test looms for Adani' The Australian (Australia), 14 September 2016
2 Water Act 2000 (Qld) s 19
3 Queensland Government Media Release – " Government proposes tougher environmental laws for groundwater extraction" (12 September 2016)

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