Veolia sees growth as miners seek better waste water treatment (updated)
08/04/2014 12:29
* CEO sees revenue doubling by 2020 in metals and mining * Sees tighter regulation helping drive growth * Veolia's 2013 mining water recycling revenue 700 mln euros * Wants to boost miners' revenue, not just be a cost factor (Adds data, quotes) By Geert De Clercq PARIS, April 8 (Reuters) - France's Veolia Environnement VIE.PA expects its revenue from treating waste water from the mining and metals industries to double to 1.5 billion euros ($2.1 billion) by 2020, as it seeks a growing share of an expanding market, its CEO said on Tuesday. Antoine Frerot said mining was one of several industries being targeted by the water and waste group in order to secure half its revenue from industrial clients in coming years, as margins and revenue shrink in its traditional municipal water business. He said the mining and metals industry is the world's second-biggest user of water, with companies globally using as much as U.S. domestic consumers as they pump water into ore deposits to help extract minerals. Frerot said 70 percent of new projects by the big six mining companies were in regions suffering water shortages and saw tightening environmental regulation as the main driver of growth. But Veolia also wanted to win business by recovering minerals from the waste water, he said at a strategy briefing. "We treat their waste water, we are the last wheel of the wagon for them, a cost that is increasingly mandatory because of tightening regulation," Frerot said. He said Veolia's challenge is to become not just a cost for miners, an industry whose leading players include Rio Tinto RIO.L and BHP Billiton BLT.L , but to help them generate more revenue by recycling raw materials from waste water and help them win operating permits by integrating water recycling procedures from the start. Veolia estimates the global market for water, waste and environment services to the mining and metals sector will grow to more than 20 billion euros in 2020, from between 13 and 14 billion currently, and hopes to increase is share of that market from 5 percent to between 7 and 8 percent. Frerot said Veolia's only global competitor is French peer Suez Environnement SEVI.PA , though both compete with big regional water treatment players such as General Electric GE.N in the United States, Osmoflo in Australia and Japanese groups Kurita Water 6370.T Ebara Corp 6361.T . Total annual revenue of the mining and metals sector is about 700 billion euros per year, Frerot estimated. "Miners not only use a lot of water, but also produce huge quantities of waste water. Until recently, in most countries in the world, (this was) ... discharged in the environment without treatment." Frerot said pretax margins in mining waste water recycling are around 10 percent, which he said is higher than the narrowing margins in its French water business. ($1 = 0.7277 Euros) (Editing by Tom Pfeiffer and David Holmes) ((geert.declercq@thomsonreuters.com)(+33 14949 5343)) Keywords: VEOLIA MINING/