Watermark Global Aims To Turn Acid Mine Drainage Into Drinking Water: Even The Greens Can’t Argue With That Idea
By Charles Wyatt
minesite.com
South Africans have a few days yet before they are back at their desks, but in anticipation Minews thought it might be a good moment to take a look at Aim-traded Watermark Global, a company which should have a busy 2009. Watermark has been strangely silent since mid-October when it announced that its subsidiary Western Utilities had selected the technology it would be using to treat acid mine drainage in South Africa, where it sees a real opportunity to advance the business plan. The Alkaline Barium and Calcium process from the Council for Scientific and Industrial Research (CSIR) was the winner, but it had to jump round a pretty tricky course. At this stage we offer a warning to those of a more sensitive nature: acid mine drainage is not a particularly easy subject to digest. Acid mine drainage is a sulphuric acid solution full of nasties, and Watermark has decided that the road to riches lies in cleaning up the deep mines of the Witwatersrand Basin. It has had a couple of pilot plants operating down shafts to determine which system works best.
These worked for about five months and it was the technology developed by CSIR which came out on top, meeting some very demanding standards, including those set down by the South African National Accreditation system for industrial quality water as well as drinking water. While all this was in process Golder & Associates, a leading engineering consulting group, started on the Environmental Impact Assessment which will investigate possible sites for a commercial plant which can treat 75 megalitres of acid mine drainage per day as Phase 1 of the project. The assessment would also produce vital information to help decide whether the water should be pumped 100 kilometres through a pipeline to the area around the Rustenburg platinum mine, or handed over to the Rand Waterboard for assimilation into the drinking water system in Gauteng province.
While mulling over this announcement about the choice of technology to be used cleaning up the acid mine drainage, Minews also stumbled on the fact that a pre-feasibility study was due to be completed the following week or so after the same announcement. A short trip around the company website indicated that this promise appeared not to have been carried out. If it had been a month or two away one would assume that there had been a delay at the end, - but a week? No. More likely the South Africans decided they would get no brownie points for announcing such a thing while the market was in free-fall. Fair enough, but price sensitive information is price sensitive information whatever the conditions in the market and it would be no fun for Mr Dirk Kotze, the finance director, to be summoned to London on his first day back from holiday to explain why he had not made the announcement.
In the spirit of the New Year Minews set about seeing how much in the way for fact and educated guess work he could unearth about this pre-feasibility. Quite a lot of them contain limited information as they are simply another hurdle to be jumped in the race to a definitive study. It was already known that the clean-up operation would be based on the Alkaline Barium and Calcium process and that the parameters had been defined by the pilot plant process. New information would include engineering, primary legislation, capital and operating costs, market evaluation and sensitivity analysis, but it appears that the study has merely moved up a peg without deviation or change of pace.
The Rustenburg option has never looked like a runner. The figures tend to support this decision as the internal rate of return (IRR) would be below 15 per cent even if all the money was raised by equity finance. Going the Water Board route and the IRR would just about double if the funding was split evenly between debt and equity. Key to success lies in the fact the total operating costs behind the water supplied to Rand Water would be only R2.37 per cubic metre. That is well below the current price of water in that region of South Africa and by 2011 the Water Board reckons that the water price could be as high as R4.50 per cubic metre. It is still early days, but this has the look for an attractive project and London should be the ideal place to hunt down the money. Hopefully chief executive Wilhelm Schoeman will be able to tell us more about his company and this particular project in the spring. Not much the greenies can argue about with this one. |
