Water pricing welcomed, but serious questions remain over the Latrobe River system's resilience

Late in 2025, the Victorian Labor government approved AGL’s application to take 35 gigalitres (GL) of water from the Latrobe River system to rehabilitate the Loy Yang coal mine, and put a price of $230 per megalitre per year of the water extracted.

While welcoming the government putting a price on water, Environment Victoria and Friends of Latrobe Water have expressed disappointment that this revenue will be diverted to Gippsland regional development projects instead of being directed to repairing and protecting Gippsland’s damaged waterways.

While the decision to allocate water revenue to the Regional Jobs and Infrastructure fund is important for the region, it’s disappointing that none of the funding will be directed to river rehabilitation. The announcement has also raised concerns that it will plug funding gaps following cuts to the Mine Land Rehabilitation Authority and the Latrobe Valley Authority.

“The Latrobe River has been deprived of flows for decades and the damage already done to the river leaves it vulnerable to the impacts of climate change and ongoing demands for water,” said Hayley Sestokas, Environment Victoria Community Organising Manager.

“This was a critical opportunity to address the degradation and improve river health. Any money made from selling this water to fill the mine pit lakes, should be used to offset the impacts of that water extraction and give our rivers and Gippsland Lakes the best chance into the future.”

Tracey Anton from Friends of Latrobe Water said Gippsland has had its precious resources including water, minerals, forests and mining reserves exploited through government mismanagement and by those who remain unaccountable.

“Even our shorelines are sinking due to offshore oil and gas extraction, while the surrounding seas are polluted without consequence. Gippsland has supplied water to Melbourne, as well as gas, oil and electricity to the entire state.”

“The Water Minister cannot continue pretending that allowing miners access to river and groundwater until 2065 is acceptable. It adds insult to injury and risks causing irreversible damage to our river systems. Leadership and accountability never seem to apply to Gippsland. We are treated as the problem child no one wants to confront,” said Anton.