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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (19408)	5/12/2008 10:44:46 AM
From: LoneClone	Read Replies (1) \| Respond to of 195027

Watermark Global Intends to Clean Up South Africa’s Acid Mine Drainage At A Profit By Charles Wyatt minesite.com[tt_news]=45525&tx_ttnews[backPid]=755&cHash=3bccbd35f4 Acid mine drainage is a sulphuric acid solution generated when exposed ore comes into contact with water and air. It’s long been a problem for mines and for mining companies, as it also contains heavy metals. This very unpleasant form of water poses a severe environmental threat as underground voids gradually fill up and the toxic water then seeps into the surrounding water courses. But Aim-traded Watermark Global has a plan to clean up from the problem. Watermark has focused on the prolific Witwatersrand Basin where there are a number of deep underground mines. The company is currently operating three pilot plants at one of the old mining shafts there, pumping out acid mine drainage with a view to determining which innovative technology best suits its purpose. The first of these pilot plants uses the SAVMIN methodology patented by Mintek and operated by Atomaer. It treats four cubic metres per hour to produce water to industrial quality standards. That means it isn’t drinkable, but can be re-used by the mines. Jaco Schoeman, Watermark’s managing director and, incidentally, technical director of Mintails, patiently explained to Minews, who is no scientist, how it all works. In essence the water goes through an initial process which neutralises free acid and precipitates heavy metals by raising the pH from 3.8 to around 8. The process then raises the pH still further and this causes precipitation of the calcium sulphate which is then minimised by the addition of aluminium hydroxide to give industrial grade water. The second pilot plant uses the Gypslim process patented, designed and operated by South Africa’s Council for Scientific and Industrial Research (CSIR). It produces industrial grade water at a rate of one cubic metre per hour. Again, it takes the water through neutralisation before raising the pH to remove magnesium and then adding barium carbonate to reduce the sulphate level. But it’s the third plant that’s probably the most interesting as it treats the by-products from the other two plants, including heavy metal sludge, calcium sulphate, and ettringite to produce products which can either be re-circulated into the first two plants or sold on. Sulphuric acid, just for a start, fetches a good price, but this is not taken into account at the pilot plant stage, as Jaco is determined to adopt a conservative model that focusses on zero effluent. He is therefore meeting an environmental challenge with an environmental solution. Following the completion of tests on the pilot plants the next step will be to select the most appropriate process and then to carry out a feasibility study to assess the economics of a plant treating 75 megalitres per day (75,000,000 litres), with the potential for expansion to 200 megalitres. This study will cost £1.8 million. Development of a commercial plant is estimated at £14 million, so Watermark will have to raise some more money towards the end of the year. The company changed broker to Cenkos recently. Cenkos knows its way around town, so Watermark shouldn’t find the fundraising too onerous. There is an immediate market for the treated water. It can be sold back to the companies which created the acid mine drainage in the first place. So far Mintails has signed up for supply for its Mogale mine, DRD Gold for its West Wits gold mines, and Harmony for its Randfontein Estates gold mines. And these are just for contaminated water from the Western Basin. There are still the Central and Eastern Basins and possibly the Far East Basin. A number of deep mines are due for closure over the coming years and this treatment of acid mine drainage could prove to be a key component of the environmental requirements. In fact the Department of Water Affairs and Forestry has declared that no mine can be closed until the issues surrounding contaminated water have been addressed. As the project scales up, it is anticipated that there will be an increase in demand from numerous additional industrial buyers for the treated water because the existing natural water resources are already under pressure from rapidly increasing residential demand, whilst the industrial base continues to expand too. Early financial models indicate that the re-cycled water can be delivered at a very attractive and sustainable price. It’s been estimated that a profit of around £4 million per year can be generated from treating 75 megalitres of acid mine drainage per day. Confirmation of this will appear, or not, in the feasibility study so at this stage it must be treated merely as a ballpark figure. Looking ahead, Jaco will be taking advice from consultants as regards the site of the commercial plant. Consultants will also assess whether it is worth pumping the cleaned water to the platinum mines to the north. It is an interesting thought that as the costs rise from these deep mines, with the threat of power stoppages always in the background, it will be companies such as Mintails, which treats the old tailings dumps, and Watermark Global which may be making more money than the gold mines themselves in the coming years. Watermark will be steadily widening the audience for its story as, unlike so many offshore companies with a listing on Aim, it has its own man in London – Charles Zorab who is an ex-stockbroker. Our comments on the company will appear on both Minesite.com and Agriprods.com for obvious reasons.