Competition for existing water supplies, combined with rising regulatory and social scrutiny of mine water management plans, brings prospects of higher project costs and longer development timetables

The availability, value and ownership of water that, in years past, may have been allocated for mining project use without substantial study or dissent, are now key tickoff boxes in any mineral producer’s risk assessment checklist. Water disputes have the power, in today’s world, to erode profits and swell capex funding-and even to wash away a company’s social license to operate in a given region or district. Water acquisition and management are increasingly crucial elements from the early stages of development through the final phases of mine closure, and mining companies are learning that issues arising from water concerns can stop major projects in their tracks, sidetrack expansion plans and threaten premature closure of existing operations.

A recent study claims that about 70% of the mining operations of the five largest hard-rock mining companies are located in countries where water stress is considered a risk. (Photo courtesy of Polypipe)


As a striking and well-publicized example, in mid-January 2013 Barrick Gold self-reported a compliance failure of the water management system on the Chilean sideof its Chile/Argentina border-straddling Pascua-Lama project to local authorities. When run-off water from the mountains began flowing into the system, a key channel intended to discharge this water into the local river system rapidly eroded and collapsed. This, according to Barrick, caused a mudslide that covered a small area of vegetation in the valley below. As a result of the damage to the channel, the project had to divert some run-off water into the area of the mine’s future waste rock site, which was a violation of the project’s permit conditions.

Barrick, in a fact sheet released after the incident, said it immediately took action to contain the problem, conducted a cleanup of the affected area, and began preparing a restoration plan for a small area of vegetation that could not be recovered in the cleanup, while continuing environmental monitoring of the site.

Nevertheless, following the incident, the Chilean Environmental Authority fined the company $16 million and suspended all project construction activities in Chile until the water management plan is deemed to meet environmental standards. As project-related environmental complications escalated and project costs swelled, estimated capex costs also have risen from an initial $3 billion to an estimated $8.5 billion, with Barrick already having spent about $5 billion, and the project’s future timetable for development is unclear.

Meanwhile, in the arid southwestern U.S., a large agricultural company filed suit against Augusta Resource Corp. to stop progress on the Rosement open-pit copper project near Tucson, Arizona, because of the perceived threat the new mine would present to the use and preservation of water resources in the area. More recently, in a letter dated May 13, the U.S. Army Corps of Engineers (USACE)-a key agency in obtaining Clean Water Act (CWA) section 404 permit approval-told Rosemont pro-ject management that USACE had determined the project’s proposed habitat mitigation and monitoring plan, along with its CWA section 404 Permit materials, would not fully compensate for “unavoidable impacts” to local aquatic resources, thus posing an additional obstacle forthe project’s permit-approval timetable. (Augusta was recently acquired by HudBay Minerals-both are Canada-based companies-in a friendly takeover deal valued at roughly C$555 million.)

And, in a highly controversial move, the U.S. Environmental Protection Agency (EPA) in July released an unfavorable “proposed determination” regarding the Pebble gold-copper project in Alaska, which included restrictions that are considered by the project owner to represent a virtual veto of the project-before its mine plan has even been finalized and evaluated by government regulators. The EPA’s decision is based largely on the possible threats to local wild fisheries and water quality posed by excavation of a massive mine pit and construction of large tailings impoundments and waste rock piles that would result in discharge of dredged or fill material into these waters. This discharge, according to the EPA report, would result in complete loss of fish habitat due to elimination, dewatering, and fragmentation of streams, wetlands and other aquatic resources. In addition, water withdrawal and capture, storage, treatment, and release of wastewater associated with the mine would significantly impair nearby fish habitat and the damage would be “irreversible,” according to the agency.

Working Around Water Stress

These examples are likely harbingers of more to come. A recent study claims that about 70% of the mining operations of the five largest hard-rock mining companies are located in countries where water stress-broadly defined as the inability of available supplies to meet the needs of all potential water users-is considered a risk. The World Resources Institute says that more than half of the world’s largest coal-producing and consuming countries face high to extremely high levels of water stress.

In some regions, the mining industry has a slight advantage over agricultural or other industrial water users in that its needs can be accommodated with brackish or very low-quality water that would otherwise go unused. Barrick Gold, for example, noted on its Beyond Borders website that at the Jabal Sayid copper project in Saudi Arabia (See related story on p. 20), the primary water source will be treated wastewater trucked in daily from the city of Jedda, about 350 km away. At its Veladero mine in Argentina, 700 m3 of wastewater from the site’s mine camp is pumped daily through a 4-km pipeline and used in the leaching process. And, at the Zaldivar copper mine in Chile’s Atacama desert, wastewater is treated using microorganisms and earthworms in an ecologically friendly process that recycles 46,000 m3 of water annually.

The company also has developed a new technology-an Air-Metabisulphite treatment (AMBS)-which enables the copper flotation process to use saline or brackish water with minimal metallurgical impact. This approach, according to Barrick, improves metallurgy significantly (compared to a lime process) and allows it to reduce potential energy requirements-if water treatment was previously required.

However, mineral producers both large and small will experience additional financial pressure in the coming years, as water management costs are expected to continue to grow faster than productivity gains. The U.K.-based market research firm Global Water Initiative reported that mines spent two-and-a-half times more money on water management strategies in 2013 compared with 2009, while mining output in general only rose by 20%–50% during the same period. Smaller, single-mine operators will be increasingly vulnerable in arid countries because of their more limited financial resources and higher sensitivity to adverse events, while the larger multinational miners will incur more risk simply because of their global footprint and willingness to operate in remote, arid regions, according to Moody’s Investor Service.

CDP, an independent non-profit organization, which claims to leverage the power of hundreds of institutional investors to catalyze corporate action on environmental issues, recently noted in its report, Metals & Mining: A sector under water pressure-analysis for institutional investors of critical issues facing the industry, that institutional investor interest in water is rising significantly: the number of investor signatories to its water program has almost quadrupled in the last three years. The CDP report stated that, “Assessing the materiality of water issues for corporations is essential for institutional investors’ portfolio protection. However, it is currently very difficult for investors to integrate water information into their investment decision-making process, primarily due to a lack of adequate and consistent information about corporate water issues.”

In addition to assessing the investment concerns that the rising prospect of direct water-related risks holds for the mining industry, the CDP report also illustrates an interesting paradox: even when companies adopt conventional measures to meet urgent localized water supply problems, or invest in costly, long-term and sometimes novel methods to avoid such problems, the environment can still suffer. As examples, it pointed out that in 2009, Gold Fields had to increase its diesel-fuel burn ratefor pumping operations in Ghana by 250% as a result of a drought. Copper miner Antofagasta, facing water scarcity at its Esperanza mine in Chile’s Atacama Desert, introduced in 2010 a system to deliver sea water to the operation via a 145-km pipe-line. Both examples, spanning the gamut of available solutions from simple to complex, increased the carbon footprint of the in-volved mining operations-in Ghana, from the higher rate of diesel fuel consumption, and in Chile, due to the increased energy needed to pump water from sea level to higher elevations. Even reverse osmosis systems designed to convert raw water into purer form are generally regarded as capital- and energy-intensive.

Spending by the mining industry on water-related infrastructure is expected to exceed $13 billion in 2014, significantly more than the estimated $7.75 billionthe industry spent in 2011. Future water-related spending is almost assured to beeven higher because, apart from steadily decreasing opportunities to negotiate and secure new water rights for future needs, one of the few remaining viable avenues for miners to ensure water supply is through better treatment and recycling technology-and technology isn’t cheap. Bluefield Research predicts that the annual market for water treatment in hard rock mining alone will grow from about $9 billion in 2014 to $17 billion by 2019.

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The Virtual Curtain wastewater treatment technology developed by CSIRO eliminates the need for expensive infrastructure and generates much less sludge than conventional treatment methods, as shown by this before-and-after sequence of photos at a test pond. (Photos courtesy of CSIRO)

Expensive Solutions

Moody’s noted in a 2013 analysis of water-related mining industry problems that companies are finding innovative ways to manage and recycle water-and are increasingly opting to build large-scale desalination plants in order to secure water. For example, BHP Billiton and its partners in the Escondida copper operation in Chile are building a $3.43 billion desalination plant. Freeport-McMoRan recently completed a $315 million desalinization plant and pipeline at its El Abra mine, also located in Chile. In Peru, it is building a $452 million municipal wastewater treatment plant in connection with its $4.4 billion Cerro Verde mine expansion project. As part of the agreement with the municipality, Freeport’s local mining subsidiary, SMCV, will retain rights to reuse up to 1m3/s of treated water from the plant to help meet increased water needs from the expanded mine.

Desalination solutions come at a cost, however. These projects are large, and are priced at levels that would generally eclipse average capex figures for complete mining projects a decade ago. And they are not cheap to operate; estimates indicated that, for a mining operation in Chile, for example, a changeover from the use of fresh water to desalinated sea water could add as much as 20% to 30% to its costs. The McIlvaine Co., a market research firm based in Illinois, USA, forecasts that the industrial market for desalination pumps, valves, filters and chemicals alone will exceed $5 billion in 2015.

The lure of higher spending by the industry on water management infrastructure and services has attracted big names to the sector: Bechtel, in addition to its participation in the Escondida desalination project, also provided similar services to Anglo American for expansion and a water pipeline system at the Los Bronces mine. Fluor, likewise, has been involved in overall expansion and water-management projects at the Pueblo Viejo gold mine in Panama and Oyu Tolgoi in Mongolia

Among service and technology pro-viders, General Electric’s Power & Water group is now its largest business, bringing in almost $25 billion in revenue in 2013. Paris-based Veolia Water is considered to be the world’s largest water services company, and its CEO was quoted recently by Reuters as predicting that its revenue from treating wastewater from the mining and metals industries will double to 1.5 billion euros ($2.1 billion) by 2020. And Ashland Water Technologies, which provides specialty chemicals, equipment, and services for process and water treatment applications in mining and other industrial sectors, is currently in the process of being acquired by private investment firm for $1.8 billion.

Turning to Innovation

The adage “a rising tide lifts all boats” is an apt description for the state of investment in the mine water management and treatment markets. Generally, when large amounts of money flow into an emergent industrial-need problem, increased technical capabilities and innovation flow out to end users, and that’s the case in this instance with new approaches, technologies, products and services appearing on a steady basis. Here’s a rundown of recent developments that illustrate the broad range of science, chemistry, electronic and mechanical expertise that is being applied to meet the industry’s rapidly rising water needs.

Australian national research organization CSIRO has developed a wastewater treatment technology that uses contaminants commonly present in dirty water to clean itself. CSIRO reported recently that the technology, called Virtual Curtain, was used to remove metal contaminants from wastewater at a Queensland mine: the equivalent of around 20 Olympic swimming pools of rainwater-quality water was safely discharged, and the amount of by-product sludge typically produced by wastewater treatment was significantly reduced as well.

“Our treatment produced only a fraction of the sludge that a conventional lime-based method would have and allowed the mine water to be treated in a more environmentally sound way,” CSIRO scientist Dr. Grant Douglas said. “The technology can produce a material high in metal value, which can be reprocessed to increase a miner’s overall recovery rate and partially offset treatment costs,” according to Dr. Douglas.

Virtual Curtain uses hydrotalcites-minerals commonly used in stomach antacid medicines-to simultaneously trap a variety of contaminants-including arsenic, cadmium and iron-in one step. Researchers alter the concentration of magnesium and aluminum in the wastewater so that the pH of the water rises. Chemically altering the wastewater spurs the formation of hydrotalicites. As these crystals take shape, they entrap contaminants.

Douglas and his team developed the technology after discovering that hydrotalcites could be formed by adjusting the concentrations of common wastewater contaminants, aluminum and magnesium, to an ideal ratio and then by increasing the pH.

“By using contaminants already present in the wastewater, we have avoided the need for expensive infrastructure and complicated chemistry to treat the waste,” he said.

If required, the treated water can be purified much more efficiently via reverse osmosis and either released to the environment or recycled back into the plant, so it has huge benefits for mining operators in arid regions such as Australia and Chile. It is a more efficient and economic way to treat wastewater and is enabling the global mining industry to reduce its environmental footprint and extract wealth from waste.”

GE introduced a new membrane bioreactor (MBR) with membrane accommodating carrier (MACarrier) designed to help companies meet stringent water discharge requirements and enable greater water reuse.

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GE’s new membrane bioreactor (MBR) is combined with a membrane accommodating carrier (MACarrier) to help industrial users meet water discharge requirements and enable greater water reuse.


 Developed in GE’s China Technology Center as a solution for tough-to-treat water, the system combines a MACarrier with GE’s ZeeWeed 500D membranes. This integration, according to the company, enhances the removal of recalcitrant organics and toxicity and can achieve a chemical oxygen demand (COD) reduction of more than 50% compared with a MBR without MACarrier. The ability of the MACarrier to be biologically regenerated in the bioreactor cuts down on operational costs.

Developed in GE’s China Technology Center as a solution for tough-to-treat water, the system combines a MACarrier with GE’s ZeeWeed 500D membranes. This integration, according to the company, enhances the removal of recalcitrant organics and toxicity and can achieve a chemical oxygen demand (COD) reduction of more than 50% compared with a MBR without MACarrier. The ability of the MACarrier to be biologically regenerated in the bioreactor cuts down on operational costs.

The MBR with MACarrier combines three technologies: the MACarrier to enhance the removal of COD, toxicity, phenols and other contaminates found in wastewater; the bioreactor to remove suspended colloidal solids and reduce organic content and concentrations of nutrients; and membrane filtration as a physical membrane barrier to remove microorganisms found in wastewater.

Even the most sophisticated water treatment technologies are ineffective if they can’t be delivered to remote mining sites; logistical considerations are important. Over the last 18 months, for example, Veolia Water Technologies in South Africa designed, constructed, delivered and in-stalled several containerized water plants in two Central African mining districts, with successful results.

Both projects were considered logistical accomplishments, given the size of the plants and the geographical location in which they were installed. The first involved successful delivery of seven modular water treatment plants to a large mining project in the Democratic Republic of Congo; and the second-a water treatment plant incorporated into six large shipping containers-to the Kansanshi copper mine in Zambia.

“As the world’s eighth largest copper mine, the new Kansanshi smelter has very specific requirements for boiler feed, process and drinking water,” said Nigel Bester, project engineer at Veolia’s Engineered Systems & Services Division. “The result is a water treatment solution that upgrades river water to match each requirement exactly, with guaranteed availability due to a duty standby design on all process streams.”

The 40-ft containers are designed to be linked up to one another on site, and will operate as a single plant with multiple output streams to produce a combined 42.5 m3 of treated water per hour.

“The plant has been designed to ensure maximum viability, so we have taken a high-end engineering approach to match each treatment stage’s water with the mine’s requirements. This means that boiler feed water, for instance, isn’t subjected to all the treatment steps necessary for drinking water, which is much more viable than treating all the feed water to high-quality drinking standards regardless of its application,” said Bester.

After clarification, iron removal and sand filtration, the drinking water train consists of activated carbon filtration, polishing and UV disinfection. The boiler feed water follows the same initial processes, then is diverted for carbon filtration, double-pass reverse osmosis, and passed through a polishing filter and continuous electrodeionization after passing through the initial sand filtration skids. The softened water for use in the smelter’s processes is diverted from the demineralization stream before the second pass reverse osmosis membranes.

Veolia also delivered seven modular water treatment plants to a large mining operation in the DRC-four to treat domestic sewage and three for supplying drinking water. The plants service construction and operations camps in the area.

“These plants use trickling filter technology that is ideally suited for operation in Africa,” said Warrick Sanders, project engineer at Veolia. “Trickling filter plants are robust and recover easily from power cuts with minimal disruption to the biological processes. With typically one to two sets of motors being the only moving parts, these plants need minimal maintenance.”

Plastic honeycomb carrier elements facilitate the aerobic treatment, which breaks down organic matter and supports nitrification. After a clarification process to remove accumulated biomass, water is disinfected with chlorine and discharged, while any sludge is fed back into the system for re-digestion. The three drinking water plants will source water from boreholes.

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Polypipe says its Rigidrain HDPE pipe is well suited forunderground, nonpressurized drainage applicationscommonly required at mines.

At the other end of the water-management application spectrum, piping-systems supplier Polypipe reported that it recently provided an effective solution for subsoil drainage at the tailings management facility of a major new gold project in the DRC.

When it comes on line, Banro Corp.’s Namoya mine, situated at the southwestern end of the Twangiza-Namoya gold belt, is expected to double the company’s projected gold production to more than 225,000 oz/y. Layout of the Namoya operation included a substantial tailings management facility, and following a competitive tender, Polypipe’s Ridgidrain twin-wall drainage system was selected to provide subsoil drainage for plant tailings.

Polypipe said Ridgidrain is well suited for nonpressurized, subsurface drainage applications, with perforations at regular intervals along its full length to allow safe and gradual drainage. Manufactured in high-density polyethylene (HDPE), Ridgid-rain offers excellent abrasion resistance both internally and externally to protect against both sediment within the wastewater and the rugged mine environment. It also offers high compression strength to withstand imposed loadings, but is light in weight for ease of installation and transport.

Polypipe supplied 1,386 m of 500-mm-diameter and 190 m of 600-mm-diameter Ridgidrain pipe for the project, shipped in eight 40-ft sea containers.

Polypipe’s export sales manager, Philip Wood, said: “Plastic piping systems such as Ridgidrain are up to 94% lighter than concrete alternatives, meaning that they are safer to install and move around site, and also offer considerable environmental benefits. Production and transportation are simplified and use less carbon, and additionally the product can often be re-used elsewhere when the project ends.”