In 2010, the IUCN Economics Programme began working with Rio Tinto Iron Ore (RTIO) on an ecosystem valuation study to inform the company’s environment and water management strategies for a planned extension of the Marandoo mine in Western Australia’s Pilbara region. This ongoing work is being co-funded by RTIO and the IUCN-Rio Tinto agreement in 2012 and 2013.

The planned extension of the open pit mine involves mining below water table, which requires extracting large amounts of groundwater. The lowering of the water table and the disposal of this water will potentially affect biodiversity and ecosystems in the region. The valuation study seeks to quantify the significant changes in biodiversity and ecosystem services and the value of these changes to people.

A water use hierarchy agreed between the state government and RTIO includes water use on site, water delivery to Tom Price town and mine, and reinjection of water into a nearby depleted aquifer. The study will assess the full costs and benefits associated with each water use option, including the ecosystem impacts, in order to better identify the relative merits of each.

The study will also assess the costs and benefits associated with using water to grow hay, which would allow large areas of degraded rangeland to regenerate naturally through changes to current livestock management in pastoral stations managed by RTIO in the region. RTIO intends to use the biodiversity gains on regenerated rangeland to offset the negative impact of the mine as it implements the Rio Tinto Group’s commitment to Net Positive Impact (NPI) on biodiversity. Ecosystem valuation will help to assess the capacity of this land to regenerate and the values associated with restored biodiversity and ecosystem services.

The study also aims to provide decision-making tools and recommendations for managing biodiversity and ecosystem impacts of mining and dewatering more broadly.