The provision of water supply, its usage and discharge, are major concerns for all mines, often accounting for a significant portion of the daily running costs. To reduce these costs, mines will collect as much site runoff as possible, and recycle the water whenever economically feasible. The constant recycling of on-site waters can mean that, over time, the levels of salinity, acidity or alkalinity, or other contaminants may build up within the internal water management system to a point which may lead to problems with licensed discharge requirements. This project investigated the water quality at West Cliff Colliery, in order to develop an improved system for managing water resources with minimal environmental impact. While West Cliff Colliery is totally self sufficient and independent of any town water supply, issues have arisen with the quality of water being discharged into the receiving waterways, Brennans Creek and the upper Georges River. To alleviate these issues, a new water management system (WMS) has been established to try and maintain an adequate supply of clean recycled water and to prevent uncontrolled discharges to the environment outside West Cliff's Environment Protection Licence (EPL) requirements. This paper reports on the design of the new WMS, results of monitoring its effectiveness results, and implications for mine operations and environmental licence compliance.