Loy Yang Mine Rehabilitation

About Loy Yang rehabilitation

AGL’s Loy Yang Mine has played a key role in generating electricity for Victorians for almost four decades.

As part of our transition to renewables, we are planning now to achieve a safe, stable and sustainable future for the site of the Loy Yang Mine after the closure of the Power Station in 2035.

Technical studies currently indicate that repurposing the coal mine pit as a full lake is the most viable rehabilitation option for the Loy Yang Mine. We’re continuing further technical studies to investigate options.

Application for Bulk Water Entitlement

We require access to surface water from the Latrobe River System to support final mine rehabilitation.  

A Bulk Water Entitlement is a legal right to access and use water for a specific purpose.   

In December 2025, we received notice from the Minister for Water, the Hon Gayle Tierney MP, that AGL’s Bulk Water Entitlement (BWE) applications for the purpose of Loy Yang mine rehabilitation have been approved. You can read more about AGL's Bulk Water Entitlement here  (Bulk entitlements - Water Register)

It is important to note that this decision does not replace the need for AGL to prepare a Declared Mine Rehabilitation Plan (DMRP) or participate in any other required approval processes, such as the Environment Effects Statement (EES). These remain critical steps as we progress our rehabilitation planning.  

Terms of our application

The conditional amount of water we have sought to use each year under a new BWE for rehabilitation is a maximum volume of 35.8 GL. This figure is the total of the historical average annual volume of water used for power generation at the two power stations (Loy Yang A and Loy Yang B) sourcing coal from the Loy Yang mine.

We have taken advice from Government reports that highlight how we can minimise impacts on other water users and the environmental health of the Latrobe river system.

These principles are set out in the Latrobe Valley Regional Rehabilitation Strategy (LVRRS) for good stewardship of the Latrobe River system.

Placing conditions on access to water for mine rehabilitation links water availability to climate conditions, and helps ensure that any surface water accessed for mine rehabilitation will not diminish the water entitlements of existing users and values.

The specific conditions for our application to help maintain the health of the river system include:

• The taking of water would be restricted to the wettest months in each year (June to November);
• A threshold will be in place to prevent the diversion of winter-spring baseflow in the Latrobe River;
• A limit will be in place on annual releases from Blue Rock Reservoir; and
• Surface water would be available for mine rehabilitation purposes for a period of up to 30 years from the initial supply date (which AGL intends to be from 30 June 2035 onwards, following the closure of the LYA PS) or until 2065, whichever is earlier.
   

Applications for water relating to our rehabilitation plans were available for public comment, and closed 15 December 2024. The Minister for Water then invited the public to comment on economic value of the water entitlement sought by AGL. This public consultation closed on 15 August 2025. You can view more information here: https://engage.vic.gov.au/potential-water-access-for-latrobe-mine-rehabilitation.