Coal mines have significantly increased their use of water from the Hunter River as the ongoing drought threatens the multi-billion dollar industry.
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In one example, Hunter Valley Operations, a joint venture coal mine between Glencore and Yancoal, drew just 0.012 gigalitres from the river in 2017 and 3.7 gigalitres to October this year.
The mine's annual environmental review noted the worsening situation: "HVO impounded minimal water from surface runoff in 2018 due to ongoing dry conditions".
The most recent Upper Hunter Mining Dialogue figures show the industry, which has has traditionally relied on ground water and surface water for washing coal and dust suppression, used eight per cent or 15 gigalitres of the 188 gigalitres of water that entered the Hunter River in 2018.
The previous year, it used three per cent or 6.12 gigalitres of the 204 gigalitres of water that entered the river.
Agriculture, power generators and residents are also placing increased demand on dwindling supplies.
Only 28 per cent of the water that entered the river in 2018 stayed in the system compared to 42 per cent the previous year.
The dialogue figures show 64 per cent, up from 55 per cent, was used for power generation, agriculture and town water.
The situation has become even more dire in the recent months, with Glennies Creek and Glenbawn dams now at 41 per cent.
A spokesman for Glencore, which provides operational and support services to Hunter Valley Operations, said all Hunter Glencore-operated mines had plans in place to maximise reuse and recycling of water.
"This means that allocations of fresh water available to our sites under the Water Sharing Plan for the Hunter Regulated River Water Source 2016 are not the principal source of water for operations but can be drawn upon to supplement inventories in times of drought," he said.
"We continue to assess options for sharing water between HVO and other mines in the area."
Australian Bureau of Statistics figures show that as water supplies come under unprecedented pressure, the coal industry has quadrupled its output over the past 20 years.
A NSW Minerals Council spokesman said the industry, which is responsible for 12,000 direct and indirect jobs, was working hard to minimise water consumption in the region.
"Mining operates under the same regulatory framework as other water users, including purchasing licences for use within the rules of water sharing plans. Some mines pay a premium for high-security water licences to help ensure continued operations and jobs. This is within rules of the water sharing plan that all users need to comply with," he said.
"The industry works hard to minimise water use, including using lower quality water that isn't suitable for agriculture, installing pipelines to share water between mines, and reusing around half of water on site."
Under the current water licencing arrangements water users must submit their water orders, which must fall within their entitlement volume, to Water NSW. Allocations are announced on July 1.
"The role of Water NSW is to deliver water to users with a legitimate entitlement under the terms of the regional water sharing plan and in the volumes determined by a resource availability assessment," a spokesman said.
"The resource availability and sustainability is under constant review."
In the Liverpool Plains, the controversial Maules Creek mine is being investigated following complaints from farmers that their groundwater has dried up.
The mine's owner, Whitehaven Coal, has denied any wrongdoing.
Environment groups argue the increasing demand for water from mining and power generation are putting the agricultural sector at risk.
"The situation in the Hunter is worsening. Fires are raging out of control and the drought shows no sign of ending," Lock the Gate Alliance spokeswoman Georgina Woods said.
"Communities and farmers are suffering and the coal mines are pumping additional water and capturing even more water that would otherwise flow into the Hunter River.
WATER RATIONS LIKELY NEXT YEAR
Water users along the regulated Hunter River are operating on 95 cent of their entitlements, however, these allocations are likely to be reduced as the drought worsens.
But the Hunter is relatively well off when compared to elsewhere in the state.
Licence holders on the regulated Peel River near Tamworth have received zero allocation. General security licence holders on the Namoi River have also received zero.
If the drought does not break in the Hunter the state government may be forced to create a strategic water reserve to keep the region's coal-fired power stations operating.
Bayswater and Liddell power stations, which supply 35 per cent of the state's electricity, need millions of litres of water a day for cooling.
The state government last created a strategic water reserve to protect the power stations during the height of the Millennium Drought in 2007.
Forty billion litres of water, which had been set aside for environmental flows, was reallocated for use by the state's power stations.
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