Streams of Gold: Water-for-Mining

By Debra Tan 9 May, 2012

Olivia Jensen on why conditions are ripe for investment and innovation in the water-for mining sector

The 2011 water-for-mining spend in China is USD230 million
Water-related infrastructure for mining to almost double to USD13.6 billion in 2016
China regulations are also kicking in with new pollution targets: cleaning up a closed mine can cost USD1 billion

The global mining sector is enjoying a boom, but demand for water-related equipment and services by the sector is growing even faster. Global Water Intelligence forecasts that water-related infrastructure for the industry will rise to $13.6 billion in 2016 from $7.7 billion in 2011 if current trends continue (Global Water Intelligence 2011 Water for Mining Report).

At the moment, the top spenders are Australia $1.54 billion in 2011 and Peru $794 million, which compares with an estimated annual spend of $203 million in China.

Rapid growth in the water-for-mining area is being propelled by several factors. It is partly a question of geography: the fastest growth in the mining sector in the next five years is expected to be in water-scarce bits of the world like Australia, Chile, and of course China.

“…water is becoming a more central concern for mining companies. There is no doubt: a mine without a secure water supply is a high-risk investment”

Global Water Intelligence

The second driver is technical: mining companies are exploiting lower grade ores that require more water to generate each tonne of final product.

Thirdly, there is a regulatory push: governments are tightening regulations on discharges from mines and are broadening mining companies’ responsibilities for clean-up long after a mine has closed.

Finally, some companies are also increasing expenditure on wastewater treatment of their own accord as part of their corporate environmental responsibility programmes.

For all these reasons, water is becoming a more central concern for mining companies. There is no doubt: a mine without a secure water supply is a high-risk investment.

Cross currents

Water flows throughout the mining industry. On the one hand, it is an important process input. For example, it is used for dust suppression while mining when a curtain of water is sprayed around the drill or cutter during operation. For this, fresh, filtered water is required and it may be necessary to soften water to prevent the formation of scale on equipment.

Water can also play the role of the drill. In hydraulic mining, high pressure water is directed towards the face of the mine to provide a cutting action. Water is also mixed with ores to create a slurry which can be piped away for processing.

Water is used for extraction in metals mining. There are two main processes here: cyanide leach used in gold extraction and sulphuric acid leach used in copper and nickel mining. Other mineral processing techniques involve grinding down the rock and mixing it with water as part of the separation process.

The other side of the coin is dealing with all the wastewater that mining generates, either directly in the mining process or in the form of groundwater which floods into the mine. This can be a significant challenge as mine tailings may contain mercury, cyanide, arsenic, and other highly toxic substances.

Even groundwater that has been pumped out of the mine may require treatment as it may oxidise and become acidic, dissolving minerals from the rocks, known as acid mine drainage.

Regulation kicks in

Most countries are tightening environmental regulations surrounding mining, not least because the highly toxic substances in wastewater streams pose a threat to human health as well as to the quality of the environment.

Environmental regulators are paying attention to a wider range of substances including ammonia, nitrate and selenium, pollutants that were previously not heavily regulated. China is following the trend: a national target for ammonia levels in surface water was introduced in the 12th Five Year Plan.

In recent years, China has brought in sector-specific wastewater regulations for extractive industries. These are shown in the table. Further industry-level standards are expected to be announced in the future.

Table: Specific standards for wastewater in mining sectors in China

Industry Standard introduced
Rare earths 2011
Magnesium, titanium 2010
Copper, nickel, cobalt 2010
Lead, zinc 2010
Coal 2006
Phosphate 1996
Iron and steel 1992


Cleaning up a closed mine can cost the company $1 billion

Companies also face new legal liabilities for acid mine drainage. In many countries, miners are now responsible for ensuring that waters flowing out of the mine do not contaminate surrounding surface and groundwater for decades after mining operations have ceased. Cleaning up a closed mine can cost the company $1 billion.

A relatively new concern is brine management as governments are starting to regulate the level of salt discharges. Salt disposal will be an issue for companies in the future.


Mining companies are very much aware of environmental costs. They are also aware of the potential to extract value from their waste streams.

In water scarce areas, companies are moving towards zero liquid discharge (ZLD), reusing all their process water. ZLD is set to become an important chunk of the water for mining market in the coming years. They are also looking to alternative water sources like desalination. Currently, one of the fastest-growing market niches is in seawater desalination plants for mines in Australia and Chile.

Miners are also seeking to retrieve high-value metals from waste streams. Considerable research and developments are being pumped into this area with a view to making the recovery of metals pay for the treatment process itself.

As long as commodity prices are high, mine tailings are a revenue stream which clever companies are exploiting.

The mining industry does use traditional wastewater treatment processes like coagulation, flocculation and filtration but increasingly specialized technologies are being developed and used to meet the specific challenges of the sector.

Anyone who has seen Ed Burtynsky’s photographs of mining landscapes has had their break taken away by the enormity of the impact that this industry has on the water environment. This stark recognition comes at the same time as rampant demand for minerals.

conditions are ripe for investment and innovation in the water for mining sector

These forces are coming together in a dramatic way in China where mining companies are exploiting more and more lower grade ores and lower quality coal in water scarce regions. Coupled with new caps on water use and regulations on pollutant discharges, conditions are ripe for investment and innovation in the water for mining sector. Companies in China face a golden opportunity to make a business out of improving the environment.

Contact Clair Blakeway for more information or to order a copy of the Global Water Intelligence Water for Mining report: [email protected]

Debra Tan
Author: Debra Tan
Debra heads the China Water Risk team. She was tasked with taking The Asia Water Project pilot to the next level and was responsible for the direction and build out of China Water Risk portal for ADM Capital Foundation. Debra started her career in finance, spending over a decade as a chartered accountant and investment banker. She has lived and worked in Beijing, HK, KL, London, New York and Singapore. Debra left banking to explore her creative side. She has since pursued her interest in photography and within a year had her first solo exhibition sponsored by a global bank. She also ran and organized hands-on philanthropic and luxury holidays for a small but global private members travel network and applied her auditing, financing and photography skills in the field for various charitable organizations and foundations. Debra believes that we can all make a difference, if only we see the ‘big picture’.
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