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The following day TruEnergy reported that "in the early hours of this morning, the TRUenergy Yallourn coal mine experienced significant water leakage into one of the coal conveyor tunnels under the Morwell River diversion. This follows a period of heavy rain. The water is leaking into the open cut and has stopped operations on three conveyors that transport coal to the Yallourn Power Station."<ref>TruEnergy, [http://www.truenergy.com.au/about/news/news.xhtml?newsitem=219 "Water leakage reduces coal supplies at Yallourn mine"], Media release, June 6, 2012.</ref>
While TruEnergy initially described the problem with the river as "leakage" the following day TruEnergy described the problem as being the "collapse of a section of the Morwell River Diversion which allowed water into the mine." As a result of the water flooding in, all four conveyor belts were out of action and the company desperately sought to organise a fleet of trucks to carry coal to the power station. At the time of the flood one of the power stations four generating units was undergoing maintenance and, the company stated two were on 'standby' and one operating. On the Wednesday TruEnergy stated that the one operating unit was operating "at a reduced capacity".<ref>TruEnergy, [http://www.truenergy.com.au/about/news/news.xhtml?newsitem=220 "Update on Yallourn mine"], Media Release, June 7, 2012.</ref> The following week, TruEnergy's group executive of operations and construction, Michael Hutchinson, told the ''ABC Gippsland'' that the power station would be oiperating operating back at 75% of capacity the following week. "We're certainly not looking at it as a going out of business event," he said.<ref>[http://www.abc.net.au/local/stories/2012/06/15/3525863.htm "Future of Yallourn open cut mine is safe, says TRUenergy"], ABC Gippsland, June 15, 2012.</ref>
Two weeks after the collapse, EnergyAustralia was still struggling to bring the crisis under control. The company stated that while it had reinstated one of the conveyor systems, further rain had resulted in the need to shut it down once more. As a result it had scaled power generation back from two units to one and resorted to trucking coal to keep the power station running. Plans to instal install a pumping and pipeline system to divert the Morwell River flows into the diversion channel "will not be completed until end of July", the company stated. The company also gained approval from the Environmental Protection Authority Victoria to pump untreated water out of the pit into the Latrobe River.<ref>EnergyAustralia, [http://www.energyaustralia.com.au/about-us/media-centre/current-news/yallourn-mine-update-22062012 "Yallourn Mine Update"], Media Release, June 22, 2012.</ref>
By late July, the recovery plan was still far from completed. While the company reported that a third generator had been brought online in mid July, only a "partial diversion" of the Morwell River had been achieved and that a "full temporary diversion" would not be completed until August. "A second conveyor will be reinstated once the full temporary river diversion is in place and water levels are reduced further," the company stated.<ref>EnergyAustralia, [http://www.energyaustralia.com.au/about-us/media-centre/current-news/yallourn-mine-recovery-works-on-track "Yallourn mine recovery works on track"], Media Release, July 26, 2012.</ref> Another month later the company reported that it had succeeded in preventing the Morwell River further flooding the mine and that it would focus on "reducing water levels in the East Field section of the Mine so we can recover and reinstate a second coal conveyor to ensure we have a reliable supply of sufficient coal."<ref>EnergyAustralia, [http://www.energyaustralia.com.au/about-us/media-centre/current-news/another-milestone-in-yallourn-mine-recovery "Another Milestone in Yallourn Mine Recovey Recovery Operation"], Media Release, August 28, 2012.</ref>
By mid-September 2012 the company stated that further heavy rainfall had resulted in even more water flooding into the mine pits. Further, the company warned that a permanent repair of the Morwell River Diversion "is expected to take eight months to complete depending on weather."<ref>EnergyAustralia, [http://www.energyaustralia.com.au/about-us/media-centre/current-news/yallourn-mine-recovery-update "Yallourn Mine Recovery Update"], Media Release, September 14, 2012.</ref>
===Impacts===
The collapse of the diversion embankment had significant impacts. In late 2012 EnergyAustralia's parent company, CLP, reported to the Hong Kong Stock Exchange that it had suffered a $HK644 million (approx A$83 million) loss due to the "costs of the incident, including a provision for river diversions, levees and dewatering and an impairment of fixed assets". It also earmarked an additional cost of $26 million for the rest of the financial year. Part of the impairment costs were from the idling of three of the power stations three units for most of June.<ref name=Melody>Melody Song, [http://www.latrobevalleyexpress.com.au/story/236523/109m-bill-for-yallourn/?cs=1462 "$109m bill for Yallourn"], ''Latrobe Valley Express'', August 21, 2012.</ref> The company also stated that it had delayed plans for the sharemarket share market float of EnergyAustralia at least until 2013.<ref>Brian Robbins, [http://www.smh.com.au/business/truenergys-asx-listing-delayed-as-flooding-hits-results-20120814-2463o.html "TruEnergy's ASX listing delayed as flooding hits results"], ''Sydney Morning Herald'', August 14, 2012.</ref> The fourth unit was out of commission until early August 2012.<ref>EnergyAustralia, [http://www.energyaustralia.com.au/servlet/Satellite?blobcol=urldata&blobheader=application%2Fpdf&blobheadername1=Content-Disposition&blobheadervalue1=attachment%3B+filename%3D%22EnergyAustralia+business+update+OCT+2012.pdf%22&blobkey=id&blobtable=MungoBlobs&blobwhere=1343702714021&ssbinary=true "Energy Australia: Business Update"], October 24, 2012, page 11.</ref>
Environment Victoria's Campaigns Direct, Mark Wakeham told the ''Latrobe Valley Express'' that the $109 million was likely to be an underestimate as it didn't include a provision for loss of electricity sales in the 2012/2013 financial year. "It also raises questions whether they are insured; it appears they weren’t able to secure insurance after the 2007 collapse, which means they have a massive problem on their hands, environmentally and financially,” he said. The mine disaster, he said, had crippled the prospects for a sale. “You can only imagine investor appetite for a business with an outdated power station and a broken mine as its largest Australian asset would not be particularly appetising,” Mr Wakeham said. “I think floating the business would likely flop, with traditional electricity generation businesses hit, the falling costs of solar, falling demand for electricity and Yallourn’s additional problems on site.”<ref name=Melody/>
The leader of the Victorian Greens, Greg Barber, called for a parliamentary inquiry into the disaster<ref>Ashley Gardiner, [http://www.heraldsun.com.au/news/victoria/greens-call-for-inquiry-into-yallourn-coal-mine-collapse/story-fn7x8me2-1226401489859 "Greens call for inquiry into Yallourn coal mine collapse"], ''Herald Sun'', June 19, 2012.</ref> while Environment Victoria called for an independent inquiry. "We understand about 700 ML [megalitres] of water has been accumulating on the mine site each day since the company dammed the Morwell River following the collapse of their ill-conceived river diversion. This low quality water is now being pumped into the Latrobe River with unknown impacts on the river and the Gippsland Lakes downstream. Its not good enough for coal miners to turn our rivers on and off so they can keep accessing coal, and then use the rivers as a dump for polluted water," said Environment Victoria's Campaigns Director, Make Wakeham.<ref>[http://environmentvictoria.org.au/media/mining-stops-yallourn-flooding-continues-urgent-inquiry-needed-mine-failures "Mining stops at Yallourn as flooding continues:Urgent Inquiry needed into Mine failures"], Media Release, June 22, 2012.</ref> The Opposition Labor Party backed calls for a parlaimentary parliamentary inquiry.<ref>Adam Morton, [http://www.theage.com.au/victoria/fresh-calls-for-yallourn-inquiry-20120624-20wku.html "Fresh calls for Yallourn inquiry"], ''The Age'', June 25, 2012.</ref>
For its part, the Victorian government initially avoided making any commitment to an inquiry. However, over a month after the disaster the Department of Primary Industries announced that it had "commenced a formal investigation under the Mineral Resources Sustainable Development Act (MRSDA) to determine both the root causes of the failure and whether there has been any breach of statutory requirements on the part of the mine operator."<ref>Department if Primary Industries, [http://www.dpi.vic.gov.au/earth-resources/exploration-and-mining/issues/yallourn-coal "Yallourn Coal Mine Inquiries: Collapse of the Morwell River Diversion at the Yallourn Mine June 2012"], Department of Primary Industries website, July 27, 2012.</ref>