Although the gasoline/water analogy falters a bit when applied to mining— which mostly runs on diesel fuel—experts predict that water issues will generate a lot of heat for the global mining industry in the coming years.

Perhaps the most vivid recent example of water’s ability to incinerate carefully laid plans is the controversy surrounding the $4.8-billion Conga gold/copper project in Peru, a property held by Minera Yanacocha S.R.L., in which Newmont Mining owns a 51.35% interest. Conga is an important element for Newmont, which concedes that failure of the open-pit mining project to advance to production could have an adverse effect on its future growth if it were unable to replace Conga’s anticipated out-put, which is in the range of 600,000– 700,000 oz/y of gold and 160,000– 240,000 lb/y of copper.

But Conga, located 24 km away from the joint venture (Newmont/Buenaventura) Yanacocha gold mine, has been the target of local political and community ire, lead-ing to suspension of construction activities at the Conga site in late 2011 at the request of Peru’s central government fol-lowing increasing protests by anti-mining activists led by the regional president.

At the core of the controversy are con-cerns about water. The initial plan called for draining of four high mountain lakes, with one to be used as a slag pit. Opponents claim the project would harm the water supply, both in quantity and quality. Protests led the government to seek an independent assessment of the project’s environmental impact study, lead-ing to recommendations that two of the lakes be left intact and that water storage capacity of the reservoirs be increased. However, the local opposition is convinced that the water supply will be adversely affected even with that revised approach.

In the wake of the protests and mine-construction shutdown, Minera Yanacocha has adopted a “water first” philosophy that is focused on building water reservoirs prior to the development of other project facili-ties. Newmont said the project’s plans for 2013 call for spending about $150 million in capital expenses, including approxi-mately $110 million on equipment, own-ers’ costs and engineering support; $20 million to complete reservoir construction; and another $20 million or so for commu-nity costs, roads and water systems.

However, Newmont also warned that development of Conga is contingent upon generating acceptable project returns and getting local community and government support. Should it be unable to continue with the current development plan at Conga, Newmont said it “may in the future reprioritize and reallocate capital to development alternatives in Nevada, Australia, Ghana and Indonesia, which may result in an impairment of the Conga project.”

Fighting the Battles
Newmont also has conducted a running battle of words against what it sees as mis-leading or incomplete accounts of the pro-ject and its approach to water management in the world press (see below). And, look-ing beyond the Conga conflict, it’s quite clear that industry adversaries will contin-ue their efforts to increase pressure on public-land stewards to suspend or curtail mining projects in other areas of the world as well, based on water concerns.

For example, a report released on May 1 by Earthworks—a Washington, D.C.-based nonprofit organization that describes itself as “dedicated to protecting commu-nities and the environment from the impacts of irresponsible mineral and ener-gy development while seeking sustainable solutions”—claims that existing U.S. hard rock mines will pollute up to 27 billion gal-lons of fresh water per year, and cost as much as $67 billion per year to clean, in perpetuity. The study, titled Polluting the Future: How mining companies are pollut-ing our nation's waters in perpetuity, also claims that four proposed new mines could annually pollute billions of gallons more.

The study lays blame on acid rock drainage (ARD), which can occur when sul-phide-bearing materials are excavated, exposed to air and water, and then react with oxygen and water to create sulphuric acid. The press release accompanying the release of the Earthworks study quoted Dr. Glenn Miller, a professor of environmental science at the University of Nevada—“No hard rock open pit mines exist today that can demonstrate that acid mine drainage can be stopped once it occurs on a large scale”—and went on to state that “be-cause acid mine drainage can’t be stopped, once started it must be treated until the acid generating material runs out. As acknowledged in government mine per-mitting documents, this can take hundreds or thousands of years.”

In addition to listing existing U.S. mines that “are known to generate perpetual water pollution,” the study also identifies what it terms “existing mines likely to gen-erate perpetual water pollution,” as well as four proposed mines at which it says per-petual water pollution is predicted or con-sidered at high risk (see table, p. 44). These mines, according to the study, could generate an estimated 16 billion gallons of contaminated water per year.

The 52-page report, downloadable at http://www.earthworksaction.org/files/pub-lications/PollutingTheFuture-FINAL.pdf, makes several policy recommendations:

• The U.S. Environmental Protection Agency (EPA) should use Section 404c of the Clean Water Act to protect Alaska’s Bristol Bay, which it identifies as “the nation’s most productive and valuable wild salmon fishery,” facing possible degradation from development of the proposed Pebble mine.

• Reform federal law to require hardrock mines to demonstrate, at the outset, that the mine can meet water quality stan-dards without perpetual treatment. • Reduce perceived risk by restoring feder-al regulations to prohibit mine waste dis-posal in waters of the U.S.

• Hold corporations accountable by put-ting the cost of AMD cleanup on the in-dustry, not on taxpayers.

Looking at the Problem
The foreword to the International Council on Mining and Metals’ (ICMM) 2012 report titled Water Management in Mining: A Selection of Case Studies, spells out, in broad terms, the future of the global mining industry and its relationship to water man-agement: “In mining, water is used within a broad range of activities including mineral processing, dust suppression, slurry trans-port and employee requirements. Over the last several decades, the industry has made much progress in developing closed-circuit approaches that maximize water conserva-tion. At the same time, operations are often located in areas where there are not only significant competing municipal, agricul-tural and industrial demands, but also very different perspectives on the role of water culturally and spiritually.

“Together, these characteristics lead to tough challenges and there is no simple recipe for water management in mining, particularly because the local environ-ments of mines range from extremely low to the highest rainfall areas in the world. Regardless, responsible management of water by mining companies is a key ingre-dient in ensuring their contribution to sus-tainable development is positive over the long term.”

Left unsaid is the fact that responsible management of water by mining compa-nies also is a key ingredient in profitable production: flooded pits can’t be mined, processing effectiveness can be reduced by poor-quality water, and sloppy heap leach operations may draw regulatory fines that could affect bottom lines, for example. Savvy mine operators understand the dual nature of water’s value. It can be an asset or a liability, depending on its location and use: water residing within a managed sys-tem can generally be regarded as an asset or resource; while water leaving the system can often be considered a liability.

In the U.S., Nevada is the driest state of all, averaging less than 10 in. (250 mm) of rain per year. It is also regarded as prob-ably the most extensively mineralized state based on current geological information, containing in addition to its gold and silver deposits other commodities such as cop-per, lithium, vanadium, molybdenum, tungsten, niobium and 17 rare earth min-erals, among others.

With its robust mining industry, rapidly expanding population centers, and compe-tition for scarce water supplies by industry, agriculture and municipalities, Nevada could serve as a bellwether for the global industry in recognizing and, hopefully, finding ways to resolve water management issues in resource-limited regions. The annual meeting of the Nevada Water Resources Association, held January 29-31 in Reno, confirmed the state’s mine operators are cognizant of the challenges and are actively seeking solutions to slake the industry’s thirst.

Allan Biaggi, former director of Neva-da’s Department of Conservation and Natural Resources and administrator of the Nevada Division of Environmental Protec-tion, listed a number of the challenges fac-ing the industry in his presentation at the NWRA event.

• Water is not going to be any less scarce or less precious;

• New and existing uses of water will com-pete with mining for Nevada’s water resources;

• The cost and value of water will increase;

• Water will become more politicized;

• Mineral extraction/production will in-crease and concurrently water demand will increase;

• Litigation over water issues will increase;

• Public land managers will have a greater say over water within their jurisdictions;

• The environmental impacts of mine de-watering will continue to be of concern;

• Post mining features such as pit lakes will face increased scrutiny and focus; and

• Bonding and other financial assurances will play a greater role in the long-term protection of water resources.

Given these prospects, there are specific steps that can be taken to accommodate them and ensure the health of the state’s mining industry in the coming decades, Biaggi noted, and suggested a few, including:

• State water policy must be adaptable and capable of responding to changing demands, economics and technologies for all users.

• Mining should undertake an effort of long-term water planning in conjunction with other users. The goal: optimize water use and consumption.

• Mining will continue to pursue the reuse and recycling of process waters.

• When possible, low-quality water should be used for mining production.

• Mining will develop technologies to re-duce volumes of water extracted as mines go deeper.

• Mining will continue to innovate on the reinjection/restoration of dewatered aquifers.

• Federal and state agencies must ensure consistent, fair and predictable water allocation requirements and permitting processes.

• Renewed policy direction to recognize mining as being valuable to Nevada.

Taking Steps
If the importance of water management in the long list of a mine’s typical eco-nomic and regulatory issues is accepted, then how is it defined? According to Matthew Setty, senior project manager and global mining client manager for engineering firm CH2M HILL, it compris-es “the sourcing, conveyance, diversion, storage, reuse, treatment, and/or dispos-al of all water associated with the mine and mill operation, regardless of use, and adapting to flow and quality changes both seasonally and throughout the mine life cycle.”

It’s an important part of any sustain-ability program, said Setty, noting that a company’s mine water management must be structured to deal with the harsh reali-ties of today’s operating environment; i.e.:

• “No water, no mine.”

• Lower grade ores increase water con-sumption.

• Climate change and population growth are increasing competition for water.

• Water and environmental issues must be addressed to obtain or maintain a social license to operate.

Setty said close attention to water man-agement will be necessary to comply with increasingly stringent water-discharge requirements coming from a variety of reg-ulatory sources, such as conductivity limits proposed by the U.S. EPA, new water qual-ity criteria (e.g., selenium, sulfate, nitrates) proposed by the EPA and Canadian author-ities, and whole effluent toxicity (WET) requirements from both the EPA and Canadian agencies.

Water issues change at each stage of the mining life cycle, and the water man-agement plan must adapt accordingly, he explained, and starting out with a compre-hensive plan is necessary for success. A plan would typically involve:

• An accounting of all water inputs and outputs and changes in storage.

• Attention to evaporation and transpira-tion factors.

• Initial development as part of the En-vironmental Impact Assessment.

• Realization that corporate reporting of company-wide water balance is becoming more common.

The plan would ideally be subject to ongoing refinement and redefinition, and used throughout the life cycle of the mine.

Marek Mierzejewski, CH2M HILL’s Water in Mining sector lead and co-pre-senter with Setty of the NWRA paper, wrote in the company’s Access Waterblog last year said, “As sustainability and envi-ronmental concerns have escalated, the mining industry faces increasing public, media, and regulatory scrutiny regarding how it sources, treats, and manages water. To comply with more stringent regulations and maximize efficiency, mining compa-nies now face the need for greater techno-logical and strategic approaches to water maintenance, treatment and reuse. Con-cerns of how water is used, recycled, waste is disposed of and residuals are managed, are boardroom issues for mining companies these days.

“So water, once considered a readily available and manageable resource, is now a major business concern, and frequently a deciding factor as to whether or not a mine is developed. This is particularly challeng-ing as mining often takes place in arid and semi-arid regions, like Chile and Peru, where water is a limiting factor for the development and continuation of mining operations. Many of the papers and pre-sentations at [a recent] conference provid-ed solid data on the benefits of desalina-tion in these areas to increase water sup-ply—important because a remarkable 40% of global mining projects over the next five years will be located in Chile and Peru.”

Mierzejewsk, along with four other staffers at CH2M HILL, authored a report in 2012 that examined the changing value of water in five industrial sectors: semiconduc-tor manufacturing, thermal power genera-tion, mining, chemicals, and oil and gas. The mining section focuses on the approach taken by two mining divisions within Rio Tinto to adopt water management strategies.

The examples presented in the paper illustrate what seems to be an emerging willingness among major mining compa-nies to step outside the confines of their various operations, look around and engage with organizations, regulators, other stake-holders and even competing companies to identify and resolve water-related concerns. It’s a strategy endorsed by a growing num-ber of mining advisory groups; the ICMM report referenced above, for example, states that “engagement with stakeholders is essential tor each consensus and agree-ment on the many water issues that affect the mining sector and the communities in which it operates.

“The industry’s engagement needs to be undertaken at global, regional and oper-ational levels, to ensure that it is a con-structive voice in the emerging policy debate,” it concludes.