One study will focus on the entire resources sector in Western Australia, while the other will look at water management in the Surat basin in Queensland, which is host to coal seam gas.

"These two studies will contribute to the understanding of water use and demand in the resources sector," Macfarlane said.

"The supply, management and disposal of water is critical to the sustainability of the mining sector, particularly as many Australian mines are in remote and arid areas."

The studies – "Water and the Western Australian Minerals and Energy Sector: Certainty of Supply for Future Growth" and "Coal Seam Gas Water Management" - will also look at the role industry plays in exploring and developing water resources.

The WA study is being coordinated by the Chamber of Minerals and Energy of Western Australia, in partnership with the commonwealth government, and WA's Department of Industry and Resources. The Surat basin water-study is also a partnership, with Queensland's Department of Natural Resources and Mines managing the project.

The studies are partly funded under the Australian government's regional minerals program, in conjunction with state governments and industry.

The program has a focus on encouraging exploration, mining and processing activities, and funds studies to identify infrastructure needs and find ways to remove regional impediments to the resources industry. MiningNews.net