Water wars

Two of Kambalda's heaviest hitters are headed for the Supreme Court, with South Africa's Gold Fields launching legal action against BHP Billiton over the supply of water to its St Ives operation.

Gold Fields lodged a writ in Perth last week seeking the court's intervention in a running dispute over whether BHP's Nickel West has an ongoing obligation to supply St Ives with water from Kambalda.

The dispute has its roots in the break up of Western Mining Corporation's assets more than a decade ago. Both St Ives and Nickel West were once owned by WMC.

A water supply agreement with the gold miner remained in place after the Water Corporation took over WMC's water and waste water treatment facilities in 2005, and it is understood the dispute between the two relates to that agreement.

Under the deal, BHP on-sold water to St Ives from its Nickel West operations, extending arrangements put in place when both were owned by WMC.

Gold Fields said in its Supreme Court writ it believed a new contract between the Water Corporation and Nickel West would reduce the amount of water supplied to BHP's Kambalda operations, to the point that none would be available for St Ives.

The writ seeks a declaration that St Ives' water supply agreement with BHP "has not been terminated" and that BHP is obliged to continue to supply the Gold Fields' mine even if the amount made available to it by the Water Corporation is reduced.

Gold Fields is also seeking orders from the court forcing BHP to reduce its own water use if that is what it takes to continue to supply St Ives.

"In the event that the water supply by the Water Corporation to Nickel West under the terms of the new Water Corporation agreement . . . is not sufficient to both supply to St Ives . . . and for the nickel operations of Nickel West in Kambalda, then Nickel West is entitled to reduce the water supply to St Ives under the agreement only by a proportional reduction that is equal to or less than the proportional reduction in the quantity of water used from the pipeline by Nickel West for its nickel operations in Kambalda for the same period," the writ said. BHP and Gold Fields would comment yesterday.