Kalgoorlie-Boulder's mayor says plans to "drought-proof" the historic WA mining city are progressing, following a decision to lift water restrictions imposed in February when local storage dams almost ran dry. 

City of Kalgoorlie-Boulder councillors voted unanimously at Monday night's council meeting to lift restrictions after a report showed the city's dams now contain about seven months' water supply.

The council report showed the city's dams banked 4,204 kilolitres of recycled water and stormwater between February and May — the equivalent of about two Olympic-sized swimming pools. 

Mayor John Bowler said significant work had been done to ensure restrictions were not enforced again next summer, with plans for new pumping infrastructure and additional storage dams. 

"We intend to dig another dam behind the racecourse to capture more water there, and I think there are another one or two sites where we could capture more water," he said.

Water sales to bring in millions

This year's water shortages were compounded by the city's contractual obligations to ASX-listed miner Lynas Rare Earths, which is commissioning a $575 million refinery in West Kalgoorlie. 

In 2021, the city agreed to supply Lynas around 1.7 gigalitres of recycled water from its South Boulder waste treatment plant every year.

Last year, the council completed construction of a $1.3 million, 5.5km pipeline from storage basins directly to the Lynas plant.

The council report showed industrial users — the biggest by far being Lynas — were using only 25 per cent of their allocation since the water restrictions were imposed. 

Mr Bowler said the city had been working collaboratively with industrial users and the Water Corporation over the past five months to improve its water security.

The city's 2022–23 budget has forecast revenue of $3.3 million from the sale of recycled water.

A massive $39 million of capital expenditure on sewerage and wastewater infrastructure has also been forecast over the next decade.

Deputy Mayor Glenn Wilson, who is set to run at October's mayoral election, said the decision to impose water restrictions resulted in a backlash from the community.

"We needed to make that, we've done that … I commend the staff and councillors for following through on this."

He added: "It's not over."

Desalination plant among future options

Kalgoorlie-Boulder continues to rely on the historic Golden Pipeline, built amid the city's original gold rush between 1898 and 1903, to pump fresh water 566km east from Mundaring Weir. 

A council study looking at alternative water sources found water bores in the vicinity of Kalgoorlie-Boulder returned levels of hyper-salinity, which were "not suitable for recycled water use applications in the city".

It identified small quantities of fresh water, about 50km north-west of Kalgoorlie-Boulder, but found the cost of pumping this water "makes it even more uneconomical as an alternative water source".

A desalination plant at Esperance has been flagged as a long-term solution, but was ruled out by the city's study as "a project beyond the resources of a single local government".

Councillor Dave Grills, a former Upper House Nationals MP, has long been a proponent for an Esperance desalination plant.

"A desalination plant is the way to go, and I still believe that," Mr Grills said.

"We should get out there and fight the state government because Kalgoorlie-Boulder is the piggy bank for government," he added.

"We should stop paying the amount of money we're paying for water to come up a pipeline that was good 100 years ago and isn't relevant now."