The Victorian government is helping to progress rehabilitation planning for land currently used for coal mining while ensuring water entitlements are fairly managed, with all uses and users considered.
Following two rounds of public consultation, approval has been given for AGL’s application to access water from the Latrobe River system for the rehabilitation of its Loy Yang coal mine in Gippsland when the Loy Yang A power station closes, planned for 2035.
The approval comes with a range of conditions to protect the entitlements of other uses and values and that AGL may only use the water under an approved Declared Mine Rehabilitation Plan.
Allocating surface water for Loy Yang mine rehabilitation will benefit the Gippsland community by helping to progress planning for the region and supporting a safe and stable landscape for the long term.
As part of this decision, AGL is required to pay a water access price once mine rehabilitation commences. In separate decisions and in response to the significant feedback heard during the community consultation process, all water access revenue received from AGL’s bulk water entitlement will be paid into the Regional Jobs and Infrastructure Fund for the benefit of the Latrobe Valley and Gippsland.
This will support the region’s long-term future, including through opportunities to improve waterway health and long-term resilience of the Latrobe River system, water security and efficiency projects, and enhance self-determined outcomes for Gunaikurnai Traditional Owners.
AGL’s entitlement is consistent with the Latrobe Valley Regional Rehabilitation Strategy, which means AGL may only take up to the volume used historically for power generation – a maximum of 35.8 gigalitres a year.
Access to water under the entitlement will be restricted to the wettest times of the year to mitigate impacts on priority summer and autumn river flows.
The Victorian government has also commenced the process to reduce the ‘cap’ on how much water can be taken from the Latrobe River System, known as the Permissible Consumptive Volume. This will keep water in the river that might otherwise be taken after power generation ceases.
Approval has also been given for AGL and Southern Rural Water’s separate applications to amend the existing Loy Yang power generation surface water entitlements to clarify exactly when power generation stops and water can no longer be taken under these entitlements.
Page last updated: 08/01/26