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Our role in mine rehabilitation

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The Latrobe Valley is changing. As coal-fired power stations close, mine operators must rehabilitate the mine voids and surrounding land to make them safe, stable and sustainable for the future.  

For the Hazelwood, Yallourn and Loy Yang mines, the operators - ENGIE, Energy Australia and AGL – plan to fill the mine voids with water to create pit lakes. 

We provide bulk water to major customers across Gippsland, including industries of state and national significance. 

We could be asked to supply water for mine rehabilitation in the future. If so, we could provide untreated water to help fill the mines more quickly and reduce potential community and fire safety risks.  

Our organisation is not a deciding authority for mine rehabilitation. 

The three mines are at different stages of closure and rehabilitation. The Victorian Government has indicated that the filling of these mine voids will be complete by 2065. 

Why is mine rehabilitation important? 

Rehabilitation makes the mine voids safe and stable.  

Creating pit lakes can allow the voids to be transformed for future community use as the region moves away from coal mining. This work is guided by the Victorian Government through the Latrobe Valley Regional Rehabilitation Strategy (LVRSS).  

Latrobe Valley Regional Rehabilitation Strategy 

The Latrobe Valley Regional Rehabilitation Strategy (LVRSS) is a Victorian Government strategy that guides the transformation of the mines.  

The 2023 LVRSS Amendment confirmed that surface water could be part of the solution, under specific conditions, to protect existing water users and the environment.  

More information on the Latrobe Valley Regional Rehabilitation Strategy can be found: Latrobe Valley Regional Rehabilitation Strategy 

How could our organisation be involved?  

If we are asked to supply untreated water for mine rehabilitation we would endeavour to avoid any impact on customers or the environment by: 

  • Prioritising town water, industry and environmental needs
  • Only supplying water within our existing entitlements
  • Reducing or stopping water supply during drought conditions or low water availability if required
  • Continuing to plan for future growth 

We currently supply water for fire services at Hazelwood mine site.  

Current modelling shows there is enough water in Moondarra and Blue Rock reservoirs to accommodate mine rehabilitation while supporting the above principles.   

Why would we consider supplying water for mine rehabilitation?  

Revenue from supplying water for mine rehabilitation could assist with offsetting costs which would help to put downward pressure on customer bills. 

Working together 

We’re working closely with government agencies, mine operators, Traditional Owners, the community and stakeholders to understand what their future needs might be. 

One way that we support this work is through the Central and Gippsland Region Sustainable Water Strategy, which sets out a vision for the water future of the Latrobe Valley. 

How do mine operators determine their preferred mine rehabilitation approach? 

All Latrobe Valley mines are required to have a Declared Mine Rehabilitation Plan (DMRP). These plans outline how mine operators will make former coal mines safe, stable, and sustainable for the future. 

A DMRP sets out: 

  • How the land will be rehabilitated
  • Closure goals and milestones
  • How risks will be managed
  • Community engagement steps
  • Post-mining land use plans 

DMRPs are living documents. They are updated as mine operators learn more about the site and as conditions change. The plans are reviewed and approved by the Victorian Government. 

Community involvement 

Mine operators must consult with the community when developing their DMRPs. This gives locals a chance to have their say on rehabilitation plans and future land uses. 

  • Hazelwood mine is owned by ENGIE. It closed in 2017 and rehabilitation is underway.  

Find out more about the project here: Hazelwood Rehabilitation Project | Engie 

  • Yallourn mine is owned by Energy Australia and is due to close in 2028.  

Find out about the rehabilitation and consultation process here: Have Your Say - Yallourn Transition 

  • Loy Yang mine is owned by AGL and is due to close in 2035.  

Find out about the rehabilitation and consultation process here: Loy Yang Mine Rehabilitation 

You can also read more about the mine rehabilitation process here: Latrobe Valley Regional Rehabilitation Strategy 

Frequently asked questions

No. Residential customer water needs would always come first. Any water we supply for mine rehabilitation would be low priority and can cease or reduce if needed. 

Water for mine rehabilitation would be low priority and could cease or reduce during droughts. 

We believe all water users, including large industrial and mine operators, should pay a fair price for water.  

Our pricing is regulated by the Essential Services Commission.  

The Victorian Government sets the price for water when mine operators request to obtain it from other supplies than Gippsland Water.  

In December 2025, the Minister for Water approved a bulk entitlement for AGL for the purpose of mine rehabilitation. This process included a period of public consultation which asked the community and industry about water access and the cost of water.  

You can read more about this here:  

All water we supply is managed under strict rules including maintaining minimum passing flows to protect downstream environments. These same rules apply to water for mine rehabilitation, just as they do for all our customers.  

Community engagement on mine rehabilitation plans has been undertaken by the mine operators.  

Customers and community can also stay up to date by checking the following websites for the latest information: 

Victorian Government: Rehabilitation - Resources Victoria 

Mine operators rehabilitation websites: