How do Water Access Licences (WAL) work?

By Tara OBrien
Category: Consulting


The State of NSW has the right to the control, use and flow of all water in rivers, lakes and aquifers in NSW. It does this via water sharing plans, which stipulate the amount of water available for extraction from a water source under a long-term average annual extraction limit.

The available water within the extraction limit is shared between water access licences based on the ‘share component’ of each licence and is generally expressed as a number of unit shares. It is an offence to take water from a water source without a water access licence.

BackgroundFinal landform including a large water filled void

The implications to remaining water bodies in the final landform of mines and quarries has been largely unaddressed, since the introduction of the Water Management Act in 2000 and the Water Management (General) Regulation 2018.

This is primarily due to the extended lifespan of quarries and mines where it is not unusual for operations to have continued for 50 to 100 years before closure is considered.  

The decision as to whether a water body remains in a final landform and what capacity it is expected to be must take into account requirements for licensing and the economic obligations to do so.

Water legislation

During the operational phase of the mine or quarry Schedule 1 Clause 1 of the Water Management Regulation allows for dams, for the purpose of control or prevention of soil erosion, are exempt from licensing. 

‘Dams solely for the control or prevention of soil erosion—

(a) from which no water is reticulated (unless, if the dam is fenced off for erosion control purposes, to a stock drinking trough in an adjoining paddock) or pumped, and

(b) the structural size of which is the minimum necessary to fulfil the erosion control function, and

(c) that are located on a minor stream.’

This clause exempts dams from licensing during the active mining phase.  

Post mining water bodies are then generally subject to licensing unless they meet harvestable rights criteria for landowners.

Harvestable rights

Owners or occupiers of land can collect a proportion of the rainfall run-off from the land in one or more dams without a water licence, water supply work approval, or water use approval provided it meets the harvestable rights criteria. 

In the Central and Eastern Divisions of NSW, up to 10 per cent of average annual regional rainfall run-off can be captured.

In the Western Division of NSW, all rainfall run-off can be captured.

link to calculator if we want to add

Pricing and availability

  • Availability of unit shares within the water sharing plan area can vary and it is not uncommon for a plan to be fully allocated and purchase is not possible.  

  • The unit share price is market driven although commonly up to $2,000 or more per unit share (general security).

It is obvious that the larger the water body the higher the cost of the purchase of the required WAL.  VGT have noted a number of sites where the proposed final water body may be in the order of 200 to 300 megalitres, equating to $400,000 to $600,000. This is not an insignificant financial burden in the context of site rehabilitation costs. 

Practical steps for mine and quarry operators

The future capacity of the proposed final water body will need to be quantified in order to purchase the appropriate unit shares in a Water Access Licence.  This will generally require modelling of the final landform and a water balance to be undertaken. Once the volume of water to be retained on the site is understood, operators can take steps to purchase a WAL with sufficient units ahead of mine closure and rehabilitation.

It is clear that the smaller the final water body, the less the cost of the WAL, so it may be preferable to modify the proposed final landform.  Ideally this should be considered at the development application stage however it is VGT’s experience that many sites are faced with legacy issues from historic operations and consents. 

Preference should be given at the planning stage for free-draining final landforms.  Smaller sites may find this relatively simple to achieve, depending on local topography.  Larger sites, where the depth of extraction is likely to make a free-draining structure unachievable, may need to consider backfilling of voids.  Ultimately the depth of extraction or mine staging may require modification depending on the final landform outcome desired.

Locations of the site can play a role in determining the presence of a water body in the final landform.  Metropolitan sites are likely to have a greater availability of backfilling material and demand for land suitable for industrial development, for example, than more remote rural locations.  Availability of suitable material, haulage distance and emplacement costs need to be weighed against the cost of a WAL.