Investment in water related infrastructure could nearly double during the mining industry’s current boom, suggests a new report from Global Water Intelligence (GWI). ‘Water for Mining: Opportunities in scarcity and environmental regulation’, published this month, focuses on the key growth areas of the mining industry’s unprecedented development - water supply, reuse, metal recovery, effluent treatment and brine management.
Total expenditure on water related infrastructure is currently worth $7.7 billion and could rise to as much as $13.6 billion by 2014 if current trends continue, the report says. Of this, expenditure in the equipment market, such as chemical treatment, filtration and desalination systems, is currently estimated to be $818.1 million.
GWI’s report admits that the mining market is notoriously difficult to forecast, activity being driven by cyclical commodity prices, and this makes predicting demand for mining-related water expenditure even harder. Its projections for water related capital expenditure are therefore presented as three separate scenarios, as shown here.
Whilst the industry as a whole is growing rapidly, the requirements for water infrastructure are growing faster, due to a number of factors:
- New mines are increasingly being developed in places (such as Australia and Chile) where natural freshwater resources are limited. This can entail significant investment on pipelines, wells, and even desalination plants to bring water to the site.
- Mining companies are treating wastewater to a higher standard, partly to meet new regulations, partly because they need to recycle where water is scarce, and partly because they want to implement global best practice on water stewardship.
- Increased reliance on low grade ores means that more water is required for each tonne of refined product.
- Mining companies now face responsibilities for cleaning-up acid rock drainage water long after a mine has closed.
Mining remains an inherently conservative industry but the report indicates how this may be changing. The fact that all mines have differing geological, climatic and water chemistry conditions means that an effective technology for one mine will not necessarily be replicable in another. Add new factors, such as new and stricter regulations, increasing water scarcity, lower ore grades and higher commodity prices, and the market begins to open up for new technologies and new providers.
“This means that a compelling technology, even from a small or brand new company, may be able to overcome the complex route to market and compete successfully with bigger companies and tried and tested solutions,” said Christopher Gasson, the report’s publisher. “There are plenty of opportunities for adventurous companies in a number of key segments. For example, desalination technologies have great potential as water scarcity and restrictions on supply to industry force mining companies to turn to lower quality raw water sources, like brackish groundwater and seawater.”
In addition to desalination, the market is also being driven towards reuse as a water management option, saving costs on-site and generating revenue off-site, the ‘water balance’ being the key determinant here. Great opportunities also lie in metal recovery where mine tailings are providing a valuable revenue stream. Effluent treatment and salt disposal are also highlighted as opportunities arising out of stricter regulations and higher disposal costs.
GWI’s Water for Mining report is the result of detailed interviews with 33 market participants giving their expert insight on the outlook for the industry. It is the second in their primary research report series this year, following ‘Produced Water Market: Opportunities in the oil, shale and gas sectors in North America’, published in March 2011.
