IDEAS home Printed from https://ideas.repec.org/a/eee/appene/v303y2021ics0306261921009946.html
   My bibliography  Save this article

Use of real options to enhance water-energy nexus in mine tailings management

Author

Listed:
  • Araya, Natalia
  • Ramírez, Yendery
  • Cisternas, Luis A.
  • Kraslawski, Andrzej

Abstract

The tailing storage facility is the largest water sink in most mines. An incorrect management of water content in mine tailings can become a threat to their stability, and consequently, their environmental safety. Also, water reuse and recycling are plausible options to mining companies for reasons pertaining to water scarcity. Dewatering technologies for tailings, desalination and water transport are energy intensive. Proper handling of mine tailings and water supply management can considerably improve the water-energy nexus. This article evaluates the water-energy nexus in copper mining companies using a water reduction model focused on mine tailing facilities and water supply to the mine site to find the trade-offs between water and energy. The originality of this work consists in the application of a real options approach, enabling to increase the flexibility of decision-making thanks to quantitative analysis. This approach deploys the Monte Carlo simulation to perform sensitivity and uncertainty analysis to evaluate every cost component of water management strategy. Results show that if seawater is the primary source of raw water to the mining plant, water transport represents the largest cost due to the use of energy. So, improving the reuse of water by using dewatering technologies will improve the water-energy nexus, by improving energy consumption. Even though the costs of these technologies are elevated because they are energy-intensive, reduction of water use requirements in the mine will reduce the cost of its treatment and transport.

Suggested Citation

  • Araya, Natalia & Ramírez, Yendery & Cisternas, Luis A. & Kraslawski, Andrzej, 2021. "Use of real options to enhance water-energy nexus in mine tailings management," Applied Energy, Elsevier, vol. 303(C).
    • Handle: RePEc:eee:appene:v:303:y:2021:i:c:s0306261921009946
    DOI: 10.1016/j.apenergy.2021.117626
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306261921009946
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.apenergy.2021.117626?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Zhang, Xiaodong & Vesselinov, Velimir V., 2016. "Energy-water nexus: Balancing the tradeoffs between two-level decision makers," Applied Energy, Elsevier, vol. 183(C), pages 77-87.
    2. Shao, Shuai & Liu, Jianghua & Geng, Yong & Miao, Zhuang & Yang, Yingchun, 2016. "Uncovering driving factors of carbon emissions from China’s mining sector," Applied Energy, Elsevier, vol. 166(C), pages 220-238.
    3. Hernandez-Perdomo, Elvis A. & Mun, Johnathan & Rocco S., Claudio M., 2017. "Active management in state-owned energy companies: Integrating a real options approach into multicriteria analysis to make companies sustainable," Applied Energy, Elsevier, vol. 195(C), pages 487-502.
    4. Tayari, Farid & Blumsack, Seth, 2020. "A real options approach to production and injection timing under uncertainty for CO2 sequestration in depleted shale gas reservoirs," Applied Energy, Elsevier, vol. 263(C).
    5. Hamiche, Ait Mimoune & Stambouli, Amine Boudghene & Flazi, Samir, 2016. "A review of the water-energy nexus," Renewable and Sustainable Energy Reviews, Elsevier, vol. 65(C), pages 319-331.
    6. Haque, Md. Aminul & Topal, Erkan & Lilford, Eric, 2014. "A numerical study for a mining project using real options valuation under commodity price uncertainty," Resources Policy, Elsevier, vol. 39(C), pages 115-123.
    7. Agaton, Casper Boongaling & Guno, Charmaine Samala & Villanueva, Resy Ordona & Villanueva, Riza Ordona, 2020. "Economic analysis of waste-to-energy investment in the Philippines: A real options approach," Applied Energy, Elsevier, vol. 275(C).
    8. Jeon, Chanwoong & Lee, Jeongjin & Shin, Juneseuk, 2015. "Optimal subsidy estimation method using system dynamics and the real option model: Photovoltaic technology case," Applied Energy, Elsevier, vol. 142(C), pages 33-43.
    9. Savolainen, Jyrki, 2016. "Real options in metal mining project valuation: Review of literature," Resources Policy, Elsevier, vol. 50(C), pages 49-65.
    10. Markovaara-Koivisto, Mira & Valjus, Tuire & Tarvainen, Timo & Huotari, Taija & Lerssi, Jouni & Eklund, Mikael, 2018. "Preliminary volume and concentration estimation of the Aijala tailings pond – Evaluation of geophysical methods," Resources Policy, Elsevier, vol. 59(C), pages 7-16.
    11. Tsolas, Spyridon D. & Karim, M. Nazmul & Hasan, M.M. Faruque, 2018. "Optimization of water-energy nexus: A network representation-based graphical approach," Applied Energy, Elsevier, vol. 224(C), pages 230-250.
    12. Franks, Daniel M. & Boger, David V. & Côte, Claire M. & Mulligan, David R., 2011. "Sustainable development principles for the disposal of mining and mineral processing wastes," Resources Policy, Elsevier, vol. 36(2), pages 114-122, June.
    13. Dai, Jiangyu & Wu, Shiqiang & Han, Guoyi & Weinberg, Josh & Xie, Xinghua & Wu, Xiufeng & Song, Xingqiang & Jia, Benyou & Xue, Wanyun & Yang, Qianqian, 2018. "Water-energy nexus: A review of methods and tools for macro-assessment," Applied Energy, Elsevier, vol. 210(C), pages 393-408.
    14. Ossa-Moreno, Juan & McIntyre, Neil & Ali, Saleem & Smart, James C.R. & Rivera, Diego & Lall, Upmanu & Keir, Greg, 2018. "The Hydro-economics of Mining," Ecological Economics, Elsevier, vol. 145(C), pages 368-379.
    15. Liu, Yating & Chen, Bin, 2020. "Water-energy scarcity nexus risk in the national trade system based on multiregional input-output and network environ analyses," Applied Energy, Elsevier, vol. 268(C).
    16. Tian, Lixin & Pan, Jianglai & Du, Ruijin & Li, Wenchao & Zhen, Zaili & Qibing, Gao, 2017. "The valuation of photovoltaic power generation under carbon market linkage based on real options," Applied Energy, Elsevier, vol. 201(C), pages 354-362.
    17. Yang, Lin & Xu, Mao & Yang, Yuantao & Fan, Jingli & Zhang, Xian, 2019. "Comparison of subsidy schemes for carbon capture utilization and storage (CCUS) investment based on real option approach: Evidence from China," Applied Energy, Elsevier, vol. 255(C).
    18. Douglas Aitken & Diego Rivera & Alex Godoy-Faúndez & Eduardo Holzapfel, 2016. "Water Scarcity and the Impact of the Mining and Agricultural Sectors in Chile," Sustainability, MDPI, vol. 8(2), pages 1-18, February.
    19. Glensk, Barbara & Madlener, Reinhard, 2019. "The value of enhanced flexibility of gas-fired power plants: A real options analysis," Applied Energy, Elsevier, vol. 251(C), pages 1-1.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Carlos Cacciuttolo & Deyvis Cano, 2023. "Spatial and Temporal Study of Supernatant Process Water Pond in Tailings Storage Facilities: Use of Remote Sensing Techniques for Preventing Mine Tailings Dam Failures," Sustainability, MDPI, vol. 15(6), pages 1-32, March.
    2. Lohrmann, Alena & Farfan, Javier & Lohrmann, Christoph & Kölbel, Julian Fritz & Pettersson, Frank, 2023. "Troubled waters: Estimating the role of the power sector in future water scarcity crises," Energy, Elsevier, vol. 282(C).
    3. Carlos Cacciuttolo Vargas & Alex Marinovic Pulido, 2022. "Sustainable Management of Thickened Tailings in Chile and Peru: A Review of Practical Experience and Socio-Environmental Acceptance," Sustainability, MDPI, vol. 14(17), pages 1-65, August.
    4. Cox, Benjamin & Innis, Sally & Mortaza, Adnan & Kunz, Nadja C. & Steen, John, 2022. "A unified metric for costing tailings dams and the consequences for tailings management," Resources Policy, Elsevier, vol. 78(C).
    5. Carlos Cacciuttolo & Edison Atencio, 2022. "Past, Present, and Future of Copper Mine Tailings Governance in Chile (1905–2022): A Review in One of the Leading Mining Countries in the World," IJERPH, MDPI, vol. 19(20), pages 1-41, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Martine Van den Boomen & Sjoerd Van der Meulen & Jonathan Van Ekris & Roel Spanjers & Olle Ten Voorde & Janwim Mulder & Peter Blommaart, 2021. "Optimized Expansion Strategy for a Hydrogen Pipe Network in the Port of Rotterdam with Compound Real Options Analysis," Sustainability, MDPI, vol. 13(16), pages 1-23, August.
    2. Raisa Pérez-Vas & Félix Puime Guillén & Joaquín Enríquez-Díaz, 2021. "Valuation of a Company Producing and Trading Seaweed for Human Consumption: Classical Methods vs. Real Options," IJERPH, MDPI, vol. 18(10), pages 1-13, May.
    3. Juliana Segura-Salazar & Luís Marcelo Tavares, 2018. "Sustainability in the Minerals Industry: Seeking a Consensus on Its Meaning," Sustainability, MDPI, vol. 10(5), pages 1-38, May.
    4. Ding, Tao & Liang, Liang & Zhou, Kaile & Yang, Min & Wei, Yuqi, 2020. "Water-energy nexus: The origin, development and prospect," Ecological Modelling, Elsevier, vol. 419(C).
    5. Gao, Xuerui & Zhao, Yong & Lu, Shibao & Chen, Qianyun & An, Tingli & Han, Xinxueqi & Zhuo, La, 2019. "Impact of coal power production on sustainable water resources management in the coal-fired power energy bases of Northern China," Applied Energy, Elsevier, vol. 250(C), pages 821-833.
    6. Chen, Chen & Zhang, Xiaodong & Zhang, Huayong & Cai, Yanpeng & Wang, Shuguang, 2022. "Managing water-energy-carbon nexus in integrated regional water network planning through graph theory-based bi-level programming," Applied Energy, Elsevier, vol. 328(C).
    7. Lv, J. & Li, Y.P. & Shan, B.G. & Jin, S.W. & Suo, C., 2018. "Planning energy-water nexus system under multiple uncertainties – A case study of Hebei province," Applied Energy, Elsevier, vol. 229(C), pages 389-403.
    8. Zhou, Yuanchun & Ma, Mengdie & Gao, Peiqi & Xu, Qiming & Bi, Jun & Naren, Tuya, 2019. "Managing water resources from the energy - water nexus perspective under a changing climate: A case study of Jiangsu province, China," Energy Policy, Elsevier, vol. 126(C), pages 380-390.
    9. Papapostolou, Christiana M. & Kondili, Emilia M. & Zafirakis, Dimitris P. & Tzanes, Georgios T., 2020. "Sustainable water supply systems for the islands: The integration with the energy problem," Renewable Energy, Elsevier, vol. 146(C), pages 2577-2588.
    10. Jean-Baptiste Bahers & Paula Higuera & Anne Ventura & Nicolas Antheaume, 2020. "The “Metal-Energy-Construction Mineral” Nexus in the Island Metabolism: The Case of the Extractive Economy of New Caledonia," Sustainability, MDPI, vol. 12(6), pages 1-18, March.
    11. Tsolas, Spyridon D. & Karim, M. Nazmul & Hasan, M.M. Faruque, 2018. "Optimization of water-energy nexus: A network representation-based graphical approach," Applied Energy, Elsevier, vol. 224(C), pages 230-250.
    12. Ana Luiza Fontenelle & Erik Nilsson & Ieda Geriberto Hidalgo & Cintia B. Uvo & Drielli Peyerl, 2022. "Temporal Understanding of the Water–Energy Nexus: A Literature Review," Energies, MDPI, vol. 15(8), pages 1-21, April.
    13. Cano-Rodríguez, Sara & Rubio-Varas, Mar & Sesma-Martín, Diego, 2022. "At the crossroad between green and thirsty: Carbon emissions and water consumption of Spanish thermoelectricity generation, 1969–2019," Ecological Economics, Elsevier, vol. 195(C).
    14. Wu, X.D. & Chen, G.Q., 2017. "Energy and water nexus in power generation: The surprisingly high amount of industrial water use induced by solar power infrastructure in China," Applied Energy, Elsevier, vol. 195(C), pages 125-136.
    15. Wu, X.D. & Ji, Xi & Li, Chaohui & Xia, X.H. & Chen, G.Q., 2019. "Water footprint of thermal power in China: Implications from the high amount of industrial water use by plant infrastructure of coal-fired generation system," Energy Policy, Elsevier, vol. 132(C), pages 452-461.
    16. Zhang, Wei & Valencia, Andrea & Gu, Lixing & Zheng, Qipeng P. & Chang, Ni-Bin, 2020. "Integrating emerging and existing renewable energy technologies into a community-scale microgrid in an energy-water nexus for resilience improvement," Applied Energy, Elsevier, vol. 279(C).
    17. Jin, Yi & Tang, Xu & Feng, Cuiyang & Höök, Mikael, 2017. "Energy and water conservation synergy in China: 2007–2012," Resources, Conservation & Recycling, Elsevier, vol. 127(C), pages 206-215.
    18. Ahmad, Shakeel & Jia, Haifeng & Chen, Zhengxia & Li, Qian & Xu, Changqing, 2020. "Water-energy nexus and energy efficiency: A systematic analysis of urban water systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 134(C).
    19. Kirchem, Dana & Lynch, Muireann Á & Casey, Eoin & Bertsch, Valentin, 2019. "Demand response within the energy-for-water-nexus: A review," Papers WP637, Economic and Social Research Institute (ESRI).
    20. Barbara Glensk & Reinhard Madlener, 2019. "Energiewende @ Risk: On the Continuation of Renewable Power Generation at the End of Public Policy Support," Energies, MDPI, vol. 12(19), pages 1-25, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:appene:v:303:y:2021:i:c:s0306261921009946. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/405891/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.