Net Volume Licensing Project

BRUCE McCLURE, General Manager CMPA comments on the Department of Sustainability and Environment and the Department of Primary Industries proposal to investigate a Water Accounting system applicable to the extractive industries and mining in Victoria.

INDUSTRY stakeholders including the CMPA have recently attended a number of meetings where the stakeholders were invited to join a Net Volume Licensing Project steering committee that will have basically an overview role on the project that will run from November 2012 to the end of April 2013.

The DSE Officer managing this project, said “DSE and DPI initiated this project to investigate the potential to use the Water Accounting Framework developed by the Minerals Council of Australia to enable the rural water corporations (RWCs) to licence water used by a project approved under the Mineral Resources (Sustainable Development) Act 1990 (MRSDA) based on its net water use. The feasibility of this approach will be determined using case studies to look at limitations to water access, water use versus water take in the mining and extractive industries, and the information available and required by RWCs to support an application to licence an operation’s net water use”.

The extractive industry sites of two CMPA members have been included as case studies that will be carried out by Sinclair Knight Merz on behalf of DSE and DPI.

The following information was provided to all stakeholders by the Manager of the project and sums up what the DSE, DPI and the rural water corporations who are also involved in the project would like to see as an outcome.

With the involvement of the CMPA, our members will be kept up to date on what is happening with the project as it progresses and will be advised of likely impacts on industry once a final report has been produced.

BACKGROUND

In many areas across Victoria access to water entitlements to facilitate new development is either limited, or has the potential to be limited in the future, due to uncertainty about water supply or access to a secure supply of water. Limitations may arise due to difficulties in obtaining statutory approvals to satisfy large scale demands in a short time frame, limited availability of water entitlements, and/or the absence of water markets and barriers to trading where markets are established.

There are, however, a number of situations where, despite requiring significant volumes of water to be removed from an aquifer or surface water source, only a small proportion is used with a large proportion being returned to surface or groundwater. This raises the concept of net volume licensing which refers to accounting for the volume of water taken under a licence issued under section 51 of the Water Act 1989 (the Act), as being the net of that taken and subsequently returned to the source. Only that part of the licence volume not returned will have been considered to have been consumed.

Accounting for water returned to a source can be extremely complex. In some cases,it can be a simple matter, but for others, particularly for large mining developments water accounting may be extremely complex involving detailed monitoring and accounting of both surface and groundwater and differing qualities of water.

The MCA, in conjunction with the Sustainable Minerals Institute, have developed a Water Accounting Framework for the Minerals Industry. MCA member companies have endorsed an initial phase of adopting the framework including the alignment of company water metrics and definitions consistent with the Framework’ Input Output Model, and using these metrics to meet an existing company water reporting requirement.

A number of guidance tools have also been developed to assist minerals industry users in applying the framework. These include:

• Water Accounting Framework User Guide,
• Input-output MS Excel Template, and
• MCA Member Adoption Explanatory Note.

Other considerations in developing a net volume licensing framework include ensuring appropriate mechanisms are in place to provide assurance as to the suitability of water quality, or quantity of the receiving waters.

Disposal of water requires separate authorisation from that required for the taking of water. Disposing by means of a bore requires approval under section 76 of the Act, whereas disposal of water to a waterway requires appropriate approval, in most cases, by the Environment Protection Authority (EPA). Both mechanisms aim to provide assurance as to the suitability of water quality, or quantity of the receiving waters.

In most cases in Victoria, water available to be returned (disposed) to a source arises either because it is the by-product of the need to remove accumulated water in works such as a mine (de-watering), or water resulting from a process where water is used in activities such as gravel washing.

Disposal may be active or passive as long as it can be accounted for appropriately and occurs in accordance with appropriate authorisation.

In Victoria, the mining development approval framework is managed by the DPI under the MRSDA. The work plan is one of the key regulatory documents for mining under this Act. All licensees must have an approved work plan in order to do any work other than low impact exploration or quarrying under the small quarry code of practice.

Schedule 13 of the Mineral Resources Development Regulations 2002 (MRD Regs) describes the information required to be included in a work plan for a mining licence that exceeds five hectares.

Schedule 1 of the Mineral Resources (Sustainable Development) (Extractive Industries) Regulations 2010 describes the information required to be included in a Work Plan for extractive industries Work Authorities.

The ability to facilitate net volume licensing may be a fundamental consideration in the ability to fit different industries into the landscape.

PROJECT OUTPUTS

The main output of the project will be a report that includes:

• An assessment of the suitability of the Water Accounting Framework developed by the MCA to accurately measure an operation’s net water use using a case study approach. The assessment will include consideration of whether or not the Water Accounting Framework is an efficient mechanism and if/how it can be made more efficient.
• Proposed standards for measurement and assessment that must be achieved to support net volume licensing.
• A draft guideline on net volume licensing for application in mining and extractive industries.

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