The Department of Mines, Industry Regulation and Safety says a WA mine worker was injured after an electronic cigarette battery spontaneously ignited in his pocket.
The worker received severe thermal and chemical burns to his leg from the explosion, which is known as "thermal runaway", when batteries overheat to dangerously high temperatures.
The battery ignited inside a light vehicle, in which two other mine workers were travelling.
A says witnesses compared the explosion in January to "fireworks going off and flying around inside of the vehicle".
The department report claimed similar spontaneous combustion events in the United States and United Kingdom had resulted in fatalities.
The report also concluded that an e-cigarette battery explosion and fire in an underground mine or in the vicinity of an explosives magazine or fuel facility could be "potentially catastrophic".
"Given the foreseeability of these occurrences and their potential consequences, the risks associated with carry electronic cigarette devices on persons on site, particularly in potentially hazardous areas, should be reviewed and preventative and control measures developed and implemented," the report stated.
The department's report pointed to a recent study by George Mason University, which estimated there were more than 2,000 visits to US emergency rooms from 2015 to 2017 as a result of e-cigarette burns and explosion-related injuries.
The incident comes after an e-cigarette device exploded inside a parked car at a Geraldton shopping centre in January, causing a fire which damaged seven nearby cars.