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The draft Water Sharing Plan for the North Coast Fractured and Porous Rock Groundwater Sources will be on public exhibition until Sunday 20 March 2016. The Plan affects the mining industry in the Hunter and Central Coast areas as it covers the hard rock aquifers of the Sydney Basin – North Coast Groundwater Source (the Water Source).

It has been under development for several years and, subject to the public exhibition process, is scheduled to begin by 1 July 2016. It contains several provisions that are important to the extraction of groundwater by mining operations and should be carefully reviewed.

Until now, extraction of groundwater from the Water Source, including through the dewatering of mining pits, has been regulated under the Water Act 1912 (NSW) (Water Act). Once the Plan commences, the Water Source will be subject to the licensing and approval provisions of the Water Management Act 2000 (NSW) (WM Act). Existing licences under Part 5 of the Water Act will be converted to water access licences and water supply works and use approvals under the WM Act.

The Plan includes proposed rules for water extraction, the protection of the environment, management of water licensing accounts and water trading in the Plan area. It also prescribes factors relevant to the determination of applications for water supply work approvals and mandatory conditions of water access licences and water supply work approvals.   

Importantly, the Plan proposes an extraction limit, which is the maximum volume of water permitted to be extracted annually on average from the Water Source by licensed users and under basic landholder rights. Under the Plan the Water Source extraction limit has already been exceeded, which means that there is no unassigned water available to be allocated. This means new water entitlements will not be granted and must be instead secured by trading within the Water Source. Access to a small percentage of groundwater storage to account for take of water will be available in limited circumstances. This availability will be via a process that has not yet been used and applying principles that are yet to be fleshed out.

This is also reflected in the Hunter Water Shortage Zone Embargo Order that commenced on 5 February 2016. The Embargo Order prevents any further applications from being made for groundwater licences in the Hunter under Part 5 of the Water Act unless an exemption is available, with the effect that it will not be possible to apply for a new groundwater licence between now and the commencement of the Plan.

A policy has been published on securing the necessary water entitlements to extract hard rock/coal seam water mine inflows from the market or from the buried groundwater sources that underlie the Permian water sources. The practical application of this policy to the water extraction process is yet to be seen, however, may form a critical element of an approval platform for a new or expanded or continuation project.

New South Wales is not the only State grappling with the interrelationship of water rights and mining.  There is a Queensland Act, due to commence on 6 December 2016 if not proclaimed earlier, that proposes to give miners certain statutory rights to take water where it is incidentally taken during the extraction of the resource (for example, during mine dewatering) and without the need for a separate water licence under the Water Act 2000 (Qld). Miners may still need to obtain water licences or permits in other circumstances, such as for dust suppression in areas where groundwater is regulated. While the impacts of the taking of water will be assessed as part of the mining lease and environmental authority application process, there has been vocal concern about the impacts of these water rights on agricultural water users and the environment, especially as the amended legislation would mean that there is no single system that regulates the taking of water.

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