The federal government will investigate the potential environmental effects of rehabilitating the Hazelwood mine in Victoria's east amid fears it could contaminate waterways.
The brown coal-fuelled Hazelwood Power Station in the Latrobe Valley closed down in March 2017 mine owner Engie began demolition work that year.
That work is complete and Engie has proposed a rehabilitation project for the 4,000 hectare site, including a plan to transform the open-cut mine into lake between 70 and 130 metres deep.
It would hold about 640 billion litres of water and would need an additional 5b litres per year to offset evaporation.
It is estimated that it would take 10 to 20 years to fill.
The site would also host a 550ha cooling pond, which would provide a water supply for fire prevention and mitigation while the lake is being filled, and would maintain its conservation areas.
In 2021 the proposal was put forward to Victoria's Minister for Planning, who requested an environmental effects statement from Engie, to assess the impact the lake would have on the environment, cultural and historic heritage, and land use.
After calls from Environmental Justice Australia, Environment Victoria and Friends of Latrobe Water, the federal government will investigate the rehabilitation project under its Environment Protection and Biodiversity Conservation Act.
"There's the risk that in the future the mine won't be stable enough and that there could be collapses," Environment Victoria policy and advocacy manager Bronya Lipski said.
A study by geologist and hydrogeologist Steven Campbell found the clay liner of the mine was not adequately constructed and did not comply with Environment Protection Authority Victoria's standards.
The report stated concerns that the top clay layer within the mine could rupture from water saturation and the structure could be unstable once the coal was fully submerged.
It also found Engie had not adequately assessed the contaminants at the Hazelwood complex, or completed sufficient sampling of groundwater and surface water.
"There's also a massive coal ash dam in the middle of the mine, which poses some pollution risks," Ms Lipski said.
Sourcing water
The mine would use its existing groundwater licence to extract about 17-19 gigalitres per year from its aquifers, while a maximum of 24.5GL of bulk surface water would be purchased.
Under the act, the government can activate the "water trigger", which subjects large coal mines to a rigorous assessment to determine impacts on surface and ground water.
"There was always an expectation that water would be made available for rehabilitation purposes and that was certainly determined at a time when the risks of climate change on water weren't as obvious as they are now," Ms Lipski said.
"[The project's] impact on water availability is hugely significant and is a massive factor that has to be taken into account when we're thinking about rehabilitating these mines."
It is proposed that once the lake is filled it will to connect with Morwell River to maintain its water levels.
"We need really comprehensive scrutiny applied to every step of the process, from here until when the company walks away from that mine," Ms Lipski said.
"There are hundreds of ways potentially to rehabilitate a mine — you don't just have to fill it with water."
If coal ash is not removed during the rehabilitation process, the water could contain the by-products of burning coal, including heavy metals such as mercury and arsenic.
Contaminating fears
Farmers receiving irrigation water from nearby river systems are also concerned the potentially contaminated water could harm crops.
Latrobe River Irrigators president Angus Ziln said he was concerned about the water being misused, because the climate could get drier.
"This water needs to be maintained in its most pure form so that it can be continued to be used for environmental flows as well as for agriculture and production of high quality food," he said.
"Not only to feed people, but also for foodstuffs that goes into the food supply chain that feeds other animals.
"We see a great opportunity with that water if it was redeployed to agriculture, which can be used for economic benefits and in creation of new jobs for the region."
With other coal-fired power stations in the Latrobe Valley set to close within the next few decades including Yallourn, Loy Yang A and Loy Yang B, Ms Lipski hopes this rehabilitation process will set a precedent for other companies.
"It potentially means that any mining rehabilitation proposal that's wanting to use water to fill the pits will have to have this type of scrutiny applied under the federal law," she said.
"I absolutely welcome that scrutiny as part of this process."
In a statement, Engie said it welcomed the decision by the federal government to apply the provisions of a water trigger under the EPBC Act.
The company said it would give it certainty on the breadth and substance of its EES and EPBC environmental and technical studies.
