23/07/2009 - 00:00

Developing resource synergies to best effect

23/07/2009 - 00:00

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Better usage of our water resources could help spark the development of new industries.

Developing resource synergies to best effect

A COUPLE of years ago, when the biofuels sector was particularly hot, there was a lot of talk of major deals with resources companies.

The idea made a bit of sense. Fuel prices were climbing and miners, as energy intensive businesses, were also increasingly conscious of their carbon footprints.

For the numerous players in the biofuels sector it also seemed practical. They needed big contracts to underwrite the up-front capital costs of their plant.

There were downsides, of course. Biofuel production takes place in agricultural land, which was a long way away from the dry heartland of the central Pilbara where most of the large-scale mining takes place.

Other issues arose later, such as fuels competing with food for feedstock, the debate around the energy efficiency of biofuels and then the oil price fell and the issue disappeared off the radar.

So it was interesting to hear this concept remains on the radar, with quite a twist.

Recently, I was looking through a 191-page document called the 'Pilbara Integrated Water Supply Prefeasibility Study'. While I'm sure you're glad I was doing this rather than you, I thought if I trawled through a document as long as this I'd find a story for sure.

The document was the work of MWH in association with KBR and Marsden Jacob, which were commissioned the Department of Water and Department of Regional Development, through the Royalties for Regions program, to identify water supply integration opportunities in the Pilbara.

The study looks at a number of options, without coming to any particular conclusions, regarding water use in the mining province.

It examined where demand might come from as well sources of supply - desalination near the coast, mine dewatering and borefields in the interior - with the possibility of it all being linked by pipelines. Costs range from $3.63 billion to $9.43 billion.

There is plenty of water already being extracted in the area. For instance, mines around Newman are estimated to be producing around 33 gigalitres per annum, with the great bulk of this flushed down creeks.

The study also reveals there is potentially huge demand for water in the Pilbara as mining and associated infrastructure increases over the next few decades.

Unfortunately, most of the demand occurs on the coast, whereas most of the existing water is in the interior. Matching this is estimated to cost billions of dollars.

You can see from the attached map part of that story in the blue bars, with the light blue being current water use in the various parts of the region, including specific towns. The dark blue is forecast usage in 2031.

In effect, water demand is likely to double, a fact that the Chamber of Minerals and Energy jumped on with statement to highlight this issue. The study shows that water usage is likely to rise from 114GL this year, to 214GL/year by 2031.

In some ways it is a bit of a furphy to use that figure as a headline because half of that increased water usage is at one site - CITIC Pacific's magnetite mine and processing plant at Cape Preston.

CITIC Pacific is building a desalination plant to meet its known 50GL/year needs. However, there is the possibility another 50GL/year may be needed if the operation expands beyond current plans.

The rest of the water usage relates to mining, community, ports (notably dust suppression, which creates a big demand) and agriculture.

Agriculture? I wondered what that might mean. The Pilbara is known as a pastoral region with livestock relying on bores for water for most of the year. According to the study, this sector's demand for water to jump from around 11GL/year to 25GL/year.

From the map provided - which is just one of several options explored - there would be swaths of green throughout the Pilbara, an extraordinary change given what is there now. This amounts to, potentially, hundreds of square kilometres of land devoted to crops and horticulture.

The area along the Fortescue River offers the best mix of arable land and available water.

Of course, there have long been dreams of adding water to the pindan to create life. The problem is water supply in the region is patchy, even when the climate is discounted.

The iron ore mines produce huge amounts of water in their dewatering processes, which drops the watertable to allow operations to take place in conditions that would otherwise be underwater.

The problem is mine dewatering is not steady. Volumes tend to be big initially and then drop away as the mine matures. And mines might be decades long in operation, but that is probably not long enough to coax traditional agricultural investment, even if borefields are available to supplement irregular dewatering supplies or extend the life of the region.

In seeking answers to what this agricultural dream might be it was directed to state Regional Development Minister and State Development Assistant Minister, Brendon Grylls, who revealed what all these green swaths were about - in a region known to be a key political battleground at the next state election.

"I don't think we are trying to create a food bowl in the Pilbara," Mr Grylls said.

He said the potential for agriculture in the form of crops in the Pilbara arose from the work of the Agriculture Department-led WA Biofuels Taskforce, which was established in 2006.

"In and around that we started to talking to mining companies in the Pilbara who are interested in using dewatering to grow their own energy," he said.

"You have the advantage of that water already under pressure that is mainly running down creek lines.

"I think it is quite interesting.

"It is pretty early stages but we are pretty comfortable that there is some corporate interest.

Mr Grylls said mining companies had all sorts of obligations, including under native title, to create opportunities for the local population.

He hoped to see some trials under way in 12 to 18 months.

The beauty of the biofuels idea is that, if feasible, it creates a crop that has some synergy with local demand, not just in fuel benefits but also with regard to water supplies.

As the mine's operations reach closure, so the water diminishes and the need for the fuel, similarly, reduces.

This might all be another pipe dream as far as water goes in the state, but perhaps the real potential in it is that it isn't being dressed up as some mega project that will take the state forward. Instead, it's an attempt to use the state's resources to best effect in league with our premier industry, mining.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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