The high cost of water

If you had to give it a dollar figure, what price would you put on having safe, clean, accessible water? And if that supply were suddenly to disappear, what would you be willing to do or pay to get it back?

As a society, we’re beginning to realize there’s a considerable cost to having a strong, available supply of water, even though the price of the product itself is, ostensibly, free. Most places in the world pay only the cost of actually delivering water—the infrastructure to carry it, the energy to push it through pipes, and the processing needed to clean it of impurities. Rarely does anyone pay for water itself. At least, not yet.

Mining is a process-driven industry, and a big consumer of water. One study estimated that in 2013, a mid-size company’s operations used one hundred times the fresh water consumption of Metropolitan Vancouver, Canada, a region of almost 2.5 million people.[1] The statistic is galvanizing in and of itself. More so when we realize that the company recycled and reused the same water an average of five times before returning it to the environment.

Today, mining is moving into dryer areas, where water is even harder to find and access. Its supply, use, treatment for discharge—and how to manage it all—has become a critical business risk. Water is a carrier, an adjunct to the essentials we usually focus on when we’re looking at processes and how to improve them. So, how do we determine its real value in producing gold, nickel, or any other mined metal?

What if we start thinking of water as a commodity instead? Suppose we looked at it in terms of what it enables a mining operation to do? Then it becomes a driver for better, more efficient processes, and we start recognizing it for what it really is: a hugely vital asset that’s essential to this entire sector.

Here are just four things to consider when you’re looking at the real value of water in your operation.

Production shut downs or slow downs. The easiest way to assess water’s value is to monetize the risk that not managing it well can pose to your business. Issues of water quality due to recycled impurities can impact the effectiveness of processing. But interrupting the water supply—because it’s not available in sufficient quantity, or you can’t obtain the necessary discharge permissions, or there’s a lack of waste storage capacity—can bring your operation to its knees.

Environmental fines for non-compliance. With the price of minerals down and analysts saying they’re likely to stay that way, at least in the immediate future, cost-saving is always the first consideration. Having fines leveled against your company because you’ve failed to comply with regulations can be costly. If more serious breaches occur—dam failures or significant contamination—the cost to the business goes well beyond fines and may extend to prosecution. Designing robust systems for effective water management is key to managing costs...and the social license to operate.

The cost of water management: As mines move to more remote locations, the level of infrastructure needed to obtain clean water and the treatment requirements for discharge go up. Process-plant designs that do not adequately consider these factors can significantly increase the final OPEX of the operation.

Legacy issues and liabilities. Virtually every jurisdiction has rules and stipulations that require companies to leave the areas that surround their operations in as good shape as they found them, if not better. Managing the prudent, expeditious, and safe return of a site to its stakeholders is one of the best investments you can make in overall goodwill and social licence. Large mining companies are improving their accounting estimates of the costs of closures, and these are being factored into investment decisions. Designing mines to minimize closure liabilities makes good economic sense.

Truly, there’s a considerable cost to water. Especially to not managing it as effectively as we can and should. The fact that water doesn’t come with an actual price tag and invoice may make it a little less obvious, but no less valuable.

If the environmental challenges and damage the world is facing today has taught us anything, it’s the merits of fully appreciating, valuing, and protecting the resources we already have. Cure, at any price, will never be a match for prevention. So let's care for the water we've got and ensure it continues to be here.

[1] Fortin, Sébastien J.R., P.Eng., Open Pit Mining & The Cost of Water - Potential Opportunities Towards Sustainable Mining