Mining contributes between 4% and 7% of Gross Domestic Product, accounts for over 37% of exports, and has contributed more than $500bn in revenue to the national economy over the last 20 years. Australia is the lead exporter of coal, iron ore and gold, creating between $39bn and $48bn in exports between 2005 and 2007. As we move into the next decade, strong demand-led growth, particularly from India and China, will drive an ongoing need for Australian resources. A prerequisite to meeting this need, in addition to adequate infrastructure and a skilled labour force is the availability and security of renewable resources used in the extraction, processing and transport of coal and ore. In particular, the security of water is paramount. However, with the increasing nexus between water, energy (and food production) it will become increasingly difficult to separate water issues in isolation from energy and vice-versa. Water and energy will become a key factor in determining how mines are able to establish and/or expand over the next decade

Mining is currently a major driver of the Australian national economy. Mining contributes between 4% and 7% of Gross Domestic Product, accounts for over 37% of exports, and has contributed more than $500bn in revenue to the national economy over the last 20 years. Australia is the lead exporter of coal, iron ore and gold, creating between $39bn and $48bn in exports between 2005 and 2007. As we move into the next decade, strong demand-ledgrowth, particularly from India and China, will drive an ongoing need for Australian resources. A prerequisite to meeting this need, in addition to adequate infrastructure and a skilled labour force is the availability and security of renewable resources used in the extraction, processing and transport of coal and ore. In particular, the security of water is paramount. However, with the increasing nexus between water, energy (and food production) it will become increasingly difficult to separate water issues in isolation from energy and vice-versa. Water and energy will become a key factor in determining how mines are able to establish and/or expand over the next decade.

At present, water use by mining consumes 3.5% of water used in Australia, which is small compared to agriculture and urban water use. However, in local catchments, water use by mining can be a significant component of the water account and during drought periods the mining industry can be the majority water user within a region as agricultural production slows and/or mining companies purchase water entitlements.

In addition, the mining industry’s requirements for water are increasing over time. Direct water use by the industry for processing, transport and other tasks has increased by 58% over 2001 values, from 321GL/year to 413 GL/year in 2004/5 and up to 508 GL/year in 2008/9. A simple linear forward projection suggests that water use by the mining industry in 2020 will be about 1000 GL/year.

The ‘indirect’ use of water by mining includes the water needed to produce the energy required for mineral processing. Water and energy are inextricably linked in that water is used to generate energy and energy is used to pump, transport and process water. Water and energy supply systems underpin every aspect of society and connect all aspects of economic production including food, fibre, manufacturing, the provision of ecosystem services, and urban consumption. Energy use by the mining industry is currently 8% - 10% of total energy consumption in Australia, but with an average industry growth rate in energy use of ~6% p.a., the consumption of energy by the industry will increase to 13% of total energy production by 2030. To meet the increase in the electricity component of this energy demand a further 8 to 56 GL/year of water will be required for generation over and above the current ~26 GL/year needed to currently produce the electricity used by the mining industry.

The extra direct and indirect water needed by mining will be more difficult to acquire against a backdrop of reduced water consumption by other sectors. For example, the agriculture sector in the Murray-Darling Basin is set to return between 20-40% of water allocations to river flows from license buy-back schemes. Currently, 26% of surface water management areas, which comprise three-quarters of water entitlements in Australia, do not have sustainable water flows, meaning that the functioning of these rivers is compromised. In addition, about a third of groundwater management areas utilise water in excess of their recharge. Therefore, new water acquisitions for mining must be obtained against a background of decreasing water availability for all sectors.

The World Economic Forum cites the increasing ‘water and energy nexus’ (and its linkages with food production) as a ‘highly likely’ and ‘high impact’ risk on global economic production in the near to medium term. This risk is manifest through export constraints, increased costs of resource extraction, and volatility in commodity prices. The environmental costs associated with these risks directly impact on ecosystems through loss of habitat, substantial reduction in river flows, and compromised delivery of ecosystem services. With a forecasted 30% increase in global demand for water and a 40% increase in demand for energy by 2030 (of which 75% is to be met by fossil fuel consumption), coupled with a 50% increase in food demand, the demand for water by the mining industry will need to be met through improved efficiencies of water use, increased reliance on water treatment and recycled water, reduced discharge of worked water, and the acquisition of new water sources. However, few governments are yet to develop coupled water and energy policy and provide leadership in this area. What is clear is that difficult trade-offs will need to be made by society in the coming future among the allocation of water between economic, environmental societal objectives. These trade-offs will directly affect the minerals industry access to and security of water.

Best practice water management in the minerals industry

Water connects a mine site to its surrounding environment and community, so a key aspect of mine water management is to understand water allocations among different sectors and to account for the flows between these sectors and mine sites. Understanding the ‘true value’ of water to the mining industry is awareness of the full suite of risks associated with water security. The true value of water considers its economic value, as described above, as well as the environmental and social value to communities within a mining region. The social value includes both cultural amenity and its recreational role. The environmental value considers the role water plays in delivering vital ecosystem services which underpin, for example, food and fibre production.

The partitioning of scarce water resources among different users is dependent on water’s true value. Those users with a higher perceived value use will receive a greater allocation of the resource (for example, consider cases where human consumption or significant cultural/environmental icons receive
high security water allocation over economic uses). Therefore, developing a comprehensive understanding of water value improves availability of water to industry, and knowledge of water allocation in general. Knowledge of water availability allows subsequent determination of short and long term risks. Conversely, a poor understanding of water value can lead mines and companies to poor water management practices and subsequently higher risks associated with security of water availability. This can have associated financial consequences for mine sites through loss of investment attractiveness,
diminished shareholder value, and can in the longer term lead to subsequent difficulty in accessing capital, thereby limiting approvals for mine expansion or establishment.

Best practice water management in mining is aimed at maximising efficiency of mine water use and minimising impacts on other sectors. It is focused on identifying and mitigating key operational and strategic risks. At an operational level, the issues that need to be addressed are ensuring adequate water quantity and quality for production, dealing with excess water and climate variability, undertaking water information management and reporting, and meeting compliance and regulation requirements. At a strategic level, the issues are securing water for mine expansion, changes in mine plans and production goals, meeting changes in regulatory and policy conditions, dealing with legacy effects of past mining, and meeting the challenges of future climate change impacts.

Best practice operational water management requires coordinating and managing water data across a whole site for use in decision making at time scales from days to years. Central to this capability is development and maintenance of a water accounting system that enables the identification of improved water efficiencies, reduced water use, and a means of managing water quality to meet discharge conditions. A mine water account is site specific and needs to be constructed in the context of local climate, hydrogeology and landscape, and take into account inputs, outputs and all uses of water within a catchment. There is increasing evidence in the mining industry between inadequate water management, unjustifiable over-use of water resources, the industry’s reputation, and threats posed by competition for future access to water.

Future mine water management

A leading mine site will manage its water stores to minimise the dual risk of running dry and uncontrolled discharge of worked water to rivers, implement strategies for minimising losses from tasks and stores, maximise the reuse of water, ensure a low reliance on high quality water sources, minimise the volume of water in tailings, maximise return of water from tailings, and minimise flow rates through unit operations. This all needs to be achieved with minimal impact on mine yield and performance.

To fully meet these water challenges means a new focus on both water and energy systems across mine sites within the industry and between sectors is necessary. It requires a comprehensive assessment of water and energy supply and use by the industry to determine where demand management strategies can be implemented. These strategies will increase resource use efficiencies and identify alternate sources of supply that do not have the competition and greenhouse emissions overheads of current sources.

Therefore, mine water management systems of the future will need to continuously measure and monitor water stores and flows on sites, assess the energy costs of water supply, enable development of site water balances across the whole mine system, and implement an integrated water management
system. They will need to have the ability to monitor water and energy performance against efficiency metrics with the aim of reducing water use in all
tasks (e.g. ore processing, dust suppression, mine cooling, flotation, and tailings), increasing water supply per unit energy demand, and meeting ongoing water efficiency targets.

Over the last decade, regional, integrated water planning has become more common and regulatory conditions more stringent. With communities taking an increasingly active role in the setting of regional water policy by governments (for example, through the political process, councils, and natural resource management bodies) and the potential for escalating conflict over water issues, there is an increasing burden on the mining industry to meet more stringent regulatory standards and community expectations. To understand the implications of competition for water resources between mine sites and local communities, the development of programs and construction of infrastructure that enhances community water availability in synergy with mine requirements will enhance the industry’s social ‘license to operate’.

In future, reduced reliance on fresh water through increased use of alternate low quality water sources such as grey water, sewerage water and sea water will be necessary to meet increased water demand. Energy constraints will require managing water quality through blending water stores to minimise energy-expensive water treatment and maximise reuse of water in the processing plant.

Mine water discharge

Discharge from mine sites is becoming an increasingly important legacy issue, particularly as mines get deeper, extract lower grade ore, and produce increasing volumes of waste rock, tailings and spoil. Increasing pressure in many countries is occurring towards minimising discharge of mine water from sites at qualities less than the source of raw water inputs. Utilisation of passive and active treatment methodologies is required to ensure water is returned to the environment at a standard equitable or better than intake.

Accidental discharge from mine sites is a major risk to water management on mine operations, resulting in loss of community trust, increased regulation
and compliance costs, fines, and withdrawal of the social license to operate. Discharge can occur through overtopping of storages or dam wall failure by storm water during flood, seepage of worked water from storages or waste rock stockpiles into streams and aquifers, or spillages and accidents releasing worked water.

Discharge risks can be partly mitigated through comprehensive monitoring programs that allow community participation in measurement and/or analysis of data. For example, disclosure of well or stream environment data to surrounding communities, active measurement campaigns by local organisations, and ‘citizen science’ programs can all facilitate trust and dialogue between mine sites and communities.

Australian Water Accounting Framework for the minerals industry

The Australian Federal Government through the Bureau of Meteorology Water Division is developing the Australian Water Accounting Standard (AWAS) to address requirements under the Water Act (2007) to collect, hold, manage, interpret and disseminate Australia’s water information by compiling and
maintaining the National Water Accounts (section 120 Water Act, 2007). In 2009, the Preliminary Australian Water Accounting Standard was released by the independent Water Accounting Standards Board for public comment and for the development of trial water accounting reports for a limited number of examples through its Methods Pilot project. Following review of the Preliminary-AWAS, the ‘Exposure Draft – AWAS’ was made available for public review and comment in 2010 in preparation for the future release of the operational ‘Australian Water Accounting Standard 1’ for generation of General Purpose Water Accounting Reports. This will require all major water management entities in Australia to maintain water accounts and report to the government to this standard. Mining companies who are material users of water will need to comply.

To provide industry with tools to assist with water accounting, management, and reporting across multiple platforms the Minerals Council of Australia has developed and endorsed the use of an important Water Accounting Framework (http://www.minerals.org.au/environment/water/index.html) that aligns existing and emerging water reporting frameworks and meets regulatory requirements. The Water Accounting Framework consists of an ‘Input-Output (I-O) Model’ and an ‘Operational Model’, and provides a cogent, transparent, and defensible estimate of water used in a mine operation. The ‘I-O’ model enables mine operators to comply with reporting standards such as the Australian Water Accounting Standard, and quantify where water comes from, how  uch water comes from each location, and where water goes. When coupled with the ‘Operational Model’, more sophisticated analyses are possible, such as providing water information consistent with the Global Water Initiative (GWI) indicators, as well as benchmarking operational tasks and overall mine water performance against industry best practice. The Water Accounting Framework consists of four components:

1. The Contextual Statement that defines the physical, societal, and governance environment in which a mine operates, and identifies the material stores and flows of water in an operation,
2. The Input-Output Statement that summarises water inputs to a mine site by source and quality, and the outputs by destination and quality,
3. A Statement of Operational Efficiencies that uses a consistent set of definitions and terms to describe the flows of water on sites, and from this derives an industry-wide relevant index of water re-use and recycling efficiencies, and
4. An Accuracy Statement that takes into account the material flows on sites that will either be estimated, calculated/modelled or measured.

As we move into an era of increasing regulatory control over water use and discharge these tools will improve the way the mining industry acquires, uses, and releases water. Sites will require an effective means of managing water information to maintain water accounts, efficiently collect data, formally assign responsibility for water accounts to a single individual, and communicate water information into operational and strategic decision making. The benefits of this include more efficient reporting of water information to a diverse array of stakeholders, an ability to benchmark water use efficiencies and water targets among sites within a company and across the industry, increased recognition of the industry as a responsible steward of water resources, an ability to enter into water trading markets, and to contribute to strategic water resource planning processes with state and federal governments.

Professor Damian Barrett

Prof. Barrett is Director, Centre for Water in the Minerals Industry (CWiMI), Sustainable Minerals Institute, The University of Queensland, Australia.

Prof. Barrett has gained more than 20 years research experience in the Commonwealth Scientific and Industrial Research Organisation (CSIRO), Cooperative Research Centre (CRC) for Greenhouse Accounting, eWater CRC and The University of Queensland.

Prof Barrett has undertaken research projects for the Australian Greenhouse Office (now Department of Climate Change and Energy Efficiency), the National Land and Water Resources Audit, the CSIRO Climate Meteorology, The Research Institute for Innovative Technology of the Earth (RITE: Japan), NASA, state government agencies, the Australian Coal Association Research Program, Australian Research Council and major global mining companies.

Prof. Barrett has presented at more than 30 national and international workshops and conferences in the last 10 years on topics as diverse as water availability forecasting, the global terrestrial carbon cycle and greenhouse mitigation, satellite observation and modelling of water and carbon cycles, human impacts and global change, sustainability, mining and biodiversity, and water issues in the minerals industry. His current research interests include environmental biophysical modelling, physical hydrology, ecosystem services and sustainable development.