MUSCAT, AUG 13 – Australian mineral exploration firm Alara Resources says it is exploring a possible Public Private Partnership (PPP) arrangement with Haya Water, the wholly Omani government-owned national wastewater utility, to secure its water requirements for a major copper-gold mining project planned at Washihi in North Al Sharqiyah Governorate.
The proposed PPP deal, if indeed firmed up and sealed, will be first of its kind to involve the joint stock utility and potentially strengthen the way forward for similar arrangements between the public and private sectors in the Sultanate.
Alara and its local joint venture partner Al Hadeetha Resources are planning to construct a 1 million tons per annum (mtpa) copper concentration plant to process the massive quantities of copper deposits, with associated gold ore, uncovered at Washihi.
Latest probable reserves at Washihi — the first of several mines being eyed for development in joint venture with its partners — are estimated at 9.7 million tons of copper deposits with a concentration of 0.88 per cent of copper and 0.22 gram/tonne of gold.
Pending the issuance of a mining license by the Public Authority for Mining (PAM), the joint venture partners are focused on preparing the groundwork ahead of the start of mining and concentration activities.
To help source its requirement of water for its Washihi operations, Alara is in discussion with Haya Water for the supply of treated effluent. According to Alara, the utility has expressed its willingness to supply wastewater, as well as land for the construction of a sewage treatment plant around 25km away from the project site. Around 1,500 cubic metres of treated water will be supplied to the Washihi site under the arrangement.
“This PPP offers a number of benefits, including: 1) positive environmental/health impacts from an increased capacity to treat wastewater that is currently being disposed untreated; 2) reduced energy costs in delivering water to site; and 3) shorter construction time for the
water pipeline,” said Alara in a quarterly report of its activities.
Haya Water (also known as Oman Wastewater Services Company SAOC) has the sole mandate to develop and operate wastewater treatment schemes across the Sultanate (with the sole exception of Dhofar Governorate).
Further underscoring its eagerness to kick off mining activities as well as the construction of a copper concentration plant, Alara revealed at the weekend that its project management consultants, Progesys, have completed the evaluation of offers from a number of bidders for its Engineering, Procurement and Construction (EPC) package. A shortlist of bidders has been established, although a formal contract will be awarded only once a mining licence for the Washihi project is issued, it noted.
Auguring well for the financial success of the project are rising copper prices on the London Metal Exchange Exchange (LME) buoyed by global supply deficits, the company said. “The (Al Hadeetha/Washihi) project’s financial models consider copper price forecasts from leading institutions and show solid returns 1 even with copper prices remaining down to $5,593/ton. Accordingly, there is significant upside potential (beyond the Base Case) if forecast prices are realised, or even if current prices are applied over the initial ten year mine life,” it added.