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Following the fire at the Derrimut factory on Wednesday, Victoria's Environment Protection Agency (EPA) said it had conducted several inspections at the premises and issued two notices to the operators in the past one year, after a similar chemical explosion killed one person there in October 2023.

Steve Lansdell from the EPA said the agency will hold a thorough investigation into the blaze, ABC reported.

"Make no mistake, no stone will be left unturned in terms of investigations for us and other regulators," Lansdell told ABC Radio. "We'll be working really closely with WorkSafe and other investigators given there were still investigations going into the previous incident."

The factory was required to manage stormwater, which it had complied to, The Guardian reported.

The EPA also alerted the residents of Melbourne West to avoid contact with contaminated water at the surrounding suburban area after pollutants carried by water used by firefighters entered the waterways. The people were warned against coming into contact with water at Cherry Creek, Anderson's Swamp and Kayes Drain.

According to Fire Rescue Victoria (FRV), three million liters of water and 40,000 liters of foam were used to control the fire.

However, the EPA said that drinking water did not appear to be contaminated.

FRV Deputy Commissioner Joshua Fischer said more than 150 fire personnel were deployed at the factory, who were making progress in controlling the fire. Investigation is going on, though the cause of the explosion is yet to be determined.

"It's obviously still an active fire area, there's lots of contaminants, there's contaminated water runoff that we need to manage so at this time the investigation is ongoing," Fischer said.

A large number of chemicals and metals were also burned in the fire, the FRV said, but could assess the exact quantity.

After the Wednesday blaze, all factories in the neighborhood were evacuated. Chief Environmental Scientist with the Environmental Protection Agency, Jen Martin, said that the smoke from the blaze has largely dissipated. The air quality is being monitored to decide when the nearby business can reopen.

Former Greens MP and spokesperson for the Anti-Toxic Waste Alliance, Colleen Hartland, pointed out that repeated fires could lead to health hazards.

"Local residents, local friends groups have worked so hard to improve these sites and yet again, because industry couldn't manage themselves, they're going to be profoundly affected," she said.

Prof Gabriel Da Silva, a University of Melbourne, said any smoke was toxic and the presence of smoke in the area was the biggest concern.