The sight of foreign faces in Ulan Bator used to turn heads.
Now they are two-a-penny as the once remote Mongolian capital fast becomes a
hotspot for international investors. The main draw is the country’s rich
mineral deposits, which, if successfully exploited, could see the national
economy more than double over the next two decades.
Impinging on that rosy picture, however, is the tricky
question of water availability. The central Asian country suffers from extremes
in seasonal runoff, local water stress and chronic deficits.
“In the coming two decades, water demand is expected to
triple even as water suppliers are shrinking”, states 2030 WRG, which predicts
a 244,000 cubic metre per day water deficit by the end of the next decade. The
link between water stress and mineral exploitation is where much of the concern
currently lies. A substantial proportion of Mongolia’s copper and gold reserves
happen to be found in its driest spot: South Gobi. Rainfall in the desert area
ranges between zero and a measly 50mm per year.
A range of potential infrastructure options is on the table.
One of the most ambitious would see the country pump in water via a 600km
pipeline from the Orphon River in the country’s north. At $550m, the project’s
price tag puts its viability in doubt. Desalination represents another outside
option. However, question marks hang over whether landlocked Mongolia has the
deep pockets or indeed the hydrological conditions to make it happen.
For the moment, the onus is on mining companies making their
operations as water efficient as possible. The World Bank-backed International
Financial Corporation, for example, recently initiated a water management
programme with most of the major mining operators in South Gobi. Among its
early outputs is a pilot training package for companies on best practices.
“There’s a lot to be shared and gained by visiting each
another’s projects and setting among ourselves the height of each other’s bar”,
said Mark Newby, environment manager for Rio Tinto’s huge Oyu Tolgoi
copper-and-gold mine in South Gobi.
Oyu Tolgoi, which came on stream in 2013, is touted as a
benchmark for the industry. The $6.2bn project draws all its water from a 560
sq. km. subterranean aquifer, located about 400m below the desert surface. Over
two-thirds (70%) of its water use is reclaimed, recycled and then reused. High
efficiency tailings thickeners and reclaim processes account for the largest
proportion of water savings at the mine, which operates a zero-water discharge
policy.
From the “get-go”, the company realised water efficiency
would be make or break for the project, said Newby: “It’s a fossil resource and
if it’s to be used up unreasonably quickly, then that just ends the mine life
earlier”. The mine is expected to use up one fifth of the aquifer’s 6.8bn cubic
metres during its projected 27-year lifespan, according to Rio Tinto’s own
calculations.
Campaign groups have claimed that Oyu Tolgoi could
jeopardise local water availability. Rio Tinto maintains that an impermeable
layer above its main aquifer separates the brackish water that it extracts from
the cleaner, shallower water on which local communities depend. The company has
also installed sensors in over 30 wells in the area and has trained local
herders in their use, promising them real—time data on water levels.
Local concerns surrounding Rio Tinto’s mine reveal an
additional concern around mineral extraction’s impact on agricultural.
Mongolia’s Southern and Central Zones occupy terrain traditionally used by
nomadic herdsmen. Diverting already scarce water resources to mining could
imperil their livelihoods, analysts warn. Similarly, water scarcity threatens
the production of irrigated food crops, the problem is especially in the
Central Zone, which provides Ulan Bator with much of its food supplies.
Shifting agricultural production to the country’s east and
west regions, where water resources are more plentiful, represents one
potential solution. Again, a more obvious and more immediate answer is to
promote water efficiency. Among 2030 WRG’s early recommendations is an increase
in the use of drip and sprinkler irrigation, coupled with improvements in
fertiliser balance and pest control.
The most pressing water—related headache facing Mongolia
relates to Ulan Bator itself. With around 1.3 million people, the capital city
is home to over two—fifths of the total population. The city’s infrastructure
is already under huge strain, with access to clean water and sanitation
facilities among the chief problems. Rural—urban migration is set to exacerbate
these further in the coming years.
“In a high growth scenario, Ulan Bator could potentially run
out of water between 2015 and 2021, which is not that far off”, warned Alex
Mung, head of the World Economic Forum’s Water Initiative and an adviser to
2030 WRG.
Mung sees a key role for private water companies in terms of
knowledge sharing and the co—financing of vital water infrastructure. He points
to the example of South Africa, where municipal governments are offering
private operators financial incentives to reduce leakages. The companies are
remunerated according to their ability to stem water losses.
The traditional availability of water means many national
firms have yet to grasp the urgency of the problem, said Mung. That will
require a concerted awareness—raising effort. Learning to collaborate within
the business sector and with government is another imperative, he argued: “The
more we can do together, the better it will be for everyone and overall for
Mongolia.
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