Alarming mining practices by Alcoa near Perth's biggest dam could render the water undrinkable, causing water restrictions and potentially costing the state up to $2.6 billion to fix. 

The US mining giant changed its bauxite mining methods around five years ago, increasing the risk of sediment flowing into the nearby dam. 

WA Today reporter Peter Milne told 6PR Mornings one big rain event in the area could cause major issues.

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