Key Points

• Mine sites are currently extracting water from aquifers in the Pilbara and

Mid-West regions at an unsustainable rate, whereby available groundwater

resources will be placed under significant pressure in the next ten to fifteen

years.

• The Water Project aims to transport 1,000 gigalitres (GL; one GL = one billion

litres; one cubic kilometre) of water from the North-West Kimberley Region

of WA to service the mining industry in the Pilbara, Mid-West and Goldfields.

Perth’s total annual water demand, by comparison, is around 300 GL.

• The project aims to supply water as units of Individual Water Rights (IWR) of

one million litres (1ML) at a cost that is one-sixth of the current rate of

underground water supplies. Mining companies enter into a 55 year water

lease through IWR payments, leading to the immediate full payment of the

project.

• Through IWRs, mining companies are provided with two carbon credits,

ensuring the project will be carbon negative.

• The carbon credits will be provided by a tree farm watered by treated waste

water from the mines. This will allow for other facilities: a Science and

Technological Innovation Centre, a waste processing facility and a waste-

fuelled power plant.

30 August 2013 13 June 2014

Distributed Water - A Concept that Western Australia Cannot Ignore: Mr Ian Marshall

N.B: Readers can find a map of the project at the end of the article

Page 2 of 8

Commentary

FDI: What is the overall concept of The Water Project?

IM: Research suggests that the rate of underground water extractions for mining operations

in the Pilbara and Mid-West are unsustainable beyond the next 10 to 15 years. The same

research indicates that current total extractions in these regions are at least one third

greater than water recharge rates. Mining operations within the Goldfields region, on the

other hand, maintain a sustainable extraction rate from the Officer aquifer. The water in the

region, however, is relatively deep and salty, adding to the cost of extraction and rendering

it unfit for uses other than mining. This project sees water being transported from the North

West Kimberley Region of WA south to service the mining industry located in the Pilbara,

Mid-West and Goldfields.

This project will deliver total of 1,000 GL of water moved south along an inland route that

will be fully funded through the sale of IWR agreements. The agreements would see

consumers purchase a tradable right of one ML of water supplied annually for a 55-year

period. The IWR would also allow for two carbon credits that can be held or traded within

the business of the IWR’s owner. The allocation of carbon credits will ensure the energy

generation for the project is carbon negative. Furthermore, the whole purchase of available

IWRs will fully fund the project without the need for government funding or government

procurement schemes.

The project aims to generate its power through a combination of domestically manufactured

solar and wind turbine technology that results in a 24 hours a day power supply.

To allow for the provision of the carbon credits, the project will require a carbon

sequestration tree farm. The tree farm is to be primarily planted with native pines

(comprising 125,000 ha of the farm), interspersed with areas of more traditional agricultural

land usage and native vegetation (comprising the remaining 475,000 ha). The farm will be

watered using treated wastewater from the project’s linked mining sites, and irrigated

through plastic irrigation technologies. In addition to providing carbon credits, the tree farm

is designed to provide the following infrastructure:

A Science and Technology Innovation Centre focusing on research in the fields of Oil

and Gas, Mining, Agriculture, Water Conservation, Sustainability and Environmental

Science.

A waste processing facility near Perth, resulting in the city having a 100 per cent

waste collection and recycling capacity with the tree farm doubling in growth rates

in the environment envisaged.

A waste-fuelled power plant to service Perth city.

Page 3 of 8

The water resources in the north-west of WA are significant and are currently totally

underutilised both from an economic and social standpoint. Moving the water south will

allow:

A meaningful economic return from the resource

A meaningful financial input directly into the Northern Australian Community that

will allow these communities to have a level of economic self-determination.

The developments of the innovations needed for this project have the capacity for an

industry to develop in its own right.

FDI: What are the benefits and who benefits?

IM: This project will allow for a widespread benefit across Western Australia, including:

Mine sites will gain a constant quality and volume of water at a lower cost.

The local Kimberley landowners will be able to market their water and gain an

element of financial independence that no other proposal has been able to provide.

Australian Industry will gain a manufacturing capacity in specific solar panel

manufacture, and its associated technology, and in plastic irrigation technologies.

The development of this will benefit the Australian economy to the tune of $165

billion in export revenue while having a minimal effect on the environment.

Perth city will gain capacities in waste collection and power generation

Degraded farming soils around the state will be treated via compost application.

The state will gain a world leading global innovation centre, servicing relevant

sectors, including energy, mining, agricultural and environmental sciences sectors.

The project will operate at a net carbon offset, to the environment’s benefit.

FDI: What are the negatives?

IM: I am not aware of any significant negatives at this point. I have been working on this

project for some time and in some cases you end up not being able to see the negatives –

but in this case I see very few. It will be a large-scale development, so there will be those

within the community that will condemn it on that ground alone. That will always be the

case. I feel that native land rights will benefit, the environment will benefit and State’s

economy will benefit.

Page 4 of 8

The proposed Phase I study, a review of all of the literature and previous research that

underpins the concepts supporting the concept generally, will provide a clearer view of any

negatives within the project.

I am not saying there are no negatives, but none jump out at me.

FDI: Why has this not been done before?

IM: There have been a number of proposals to transport water from the far north of WA

ever since the Ord Dam was developed in the 1970s. These projects have always faced

barriers, often requiring extensive government funding as opposed to our model, which is

privately funded.

Another issue has been the primary objective of past projects to focus on bringing supply to

the Perth water market. The demand for water in Perth has never been high enough to

justify the physical cost of the required water transport infrastructure. Other proposals have

looked at supplying water to other sectors, such as agriculture, whereby the price and

volumes of water needed were financially unviable. Furthermore, previous proposals have

never satisfied a joint financially, enduring, sustainable and environmentally sound model.

FDI: How much is this likely to cost and how will this be funded?

IM: The Water Project is expected to cost around $24 billion. One Individual Water Right will

be equal to one ML of water supplied annually for 55 years. Under current planning, an IWR

would cost $24,750, pricing water at 45 cents per tonne. The sale of all of the available IWRs

would fund the construction of all aspects of the proposal.

FDI: What are the infrastructure challenges?

IM: We will provide a clearer view of these considerations through our Phase I

comprehensive study.

I believe, however, the most significant infrastructure challenge would be to supply power

for the pumping stations. The required power will be in the order of 3,750 to 4,500

megawatts and will require generation from a source other than gas or diesel in a relatively

isolated environment.

Our basic business planning suggests that, through an integrated solar panel and wind

turbine system, we could use these technologies to provide the necessary power to move

and distribute the water. The provision of infrastructure, including solar panels and water

pipes, will provide considerable manufacturing opportunities.

Page 5 of 8

FDI: How will mining operators use the water?

IM: In normal operations, iron ore miners use approximately one GL of water per million

tonnes of mined and shipped product. Mining operations primarily require water for dust

suppression, to minimise environmental and work safety hazards. Water is also used for ore

processing; base metals mining use approximately one ML of water per tonne of processed

ore concentrate. Furthermore, water supplies are often needed for transport of mined

product through a slurry pipeline.

De-watering volumes depend on the needs of individual mines. Water supplied from the

water project would be used similarly to current water usage in operations.

FDI: How will the waste concept work?

IM: The project aims to build a waste processing facility to supply the tree farm, and other

agricultural lands across WA, with compost. In turn, Perth will gain a waste processing

facility and a waste-fuelled power plant.

Current waste management in Western Australia is handled very poorly. Local governments

are responsible for waste management systems, all of which have varying levels of expertise

and competence in overall management. In 2006/2007, WA only managed to divert or

recycle 27 per cent of its waste, the lowest figure of all mainland Australian states. The

decentralisation of WA’s waste management system prevents local governments from

developing economies of scale that would allow for economical management of Perth’s

waste production.

An element of the water project is to develop a Perth waste collection facility for the city’s

entire waste production. The aim is to compost the waste for initial use on the carbon

sequestration tree farm, and then to use the waste compost to allow for re-establishing the

fertility of host WA soils within the traditional wheat belt. Composting of waste is being

embraced by a number of countries as a means of both economic waste disposal and as a

means of developing soil fertility.

Another aspect of the waste recovery is the proposed reverse logistic of transporting mine

de-watered product to the tree farm for treatment so that this water can be used to irrigate

the carbon sequestration trees, and as such, gain a benefit from this waste.

FDI: What are the benefits for food production and the environment?

IM: The Water Project provides a significant benefit to the environment. It establishes a

sustainable use for a currently wasted product that will reduce the depletion of an

unsustainable one – ground water. The project will develop the capacity to have large scale

solar and wind power sources 24/7.

On a food basis it has the potential to double WA’s wheat harvest, reclaim salt affected

farmland and replenish much of WA’s soils to a more sustainable base. This will potentially

Page 6 of 8

reduce the need to develop further farmland while increasing the overall efficiency of

current land stock.

The 100 per cent recycling model would also be good for the overall environment.

FDI: Where to from here?

IM: The next step for The Water Project is the Phase I study. This study will be a detailed

study of all published relevant work that supports the concept and the economics that

underpin the concept generally. This study is not designed to redesign the technologies

needed, or explore potential alternatives to the concept as proposed. The resources do not

exist to explore a broad range of alternatives to the basic concepts and infrastructure

presented in The Water Project.

Once the Phase I study defines the basic business case for the project to survive

economically, the project will then be further developed or modified as defined.

FDI: Mr Marshall, thank you for your time and insights.

IM: Thank you.

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Page 7 of 8

Project Map

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Page 8 of 8

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About the Interviewee: Ian Marshall is a business consultant who has worked in a broad range of sectors including forestry, training, aviation and distribution. Initially trained in Agricultural Science, Ian undertook further studies into Business Management, Economics and Marketing, and has an MBA in Strategic Planning. Mr Marshall has significant overseas experience through his previous roles as a UN Village Improvement Officer, Plantation Manager and Forestry Operator in Papua New Guinea.

*****

Any opinions or views expressed in this paper are those of the individual interviewee, unless stated to be those of

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