LIME NEUTRALIZATION TREATMENT PLANT COST

ESTIMATE

By
Nural Kuyucak
Golder Associates Ltd. , 32 Steacie Drive, Kanata, Ontario, K2K 2A9 Canada
Tel: (613) 592-9600; Fax: (613) 592-9601; nkuyucak@golder.com
1.0 INTRODUCTION

1.1 Purpose of Cost Estimate

Construction and operation of a wastewater treatment plant are often required for mining and
metallurgical projects. A basic cost information for a water treatment project may need to be
included to the cost of site development, operational and closure stages of a mining project.
Particularly, treatment of acid mine drainage (AMD) during operational and after the site closure
periods may be a major contributor for the overall project in terms of planning and cost.
Preliminary cost estimates are usually made based on project needs and projections in a feasibility
or preplanning study. At the inception stage, approximate values are necessary for general
discussions to assess the feasibility of a project where cost estimates for different processes are
used in comparing and evaluating alternatives.

1.2 Major Cost Estimate Items

An estimate for total construction (capital) costs and operation and maintenance (O&M) costs can
provide a basis for sound decisions concerning alternatives. The cost for a water treatment
project may need to be estimated at four different phases including: project preplanning or
feasibility estimates; project planning or preliminary estimates; project design; and project
construction or bid evaluation. An estimate for each phase requires costs for capital and O&M of
the projected plant. The content of “Capital Cost and O&M Cost” items are described below:

Capital Costs: Capital costs generally are incurred at the beginning of a project’s life when the
facility is initially constructed. Capital costs for the implementation of a treatment system may
differ from site to site depending on the cost of the land and site conditions such as requirements
for pumping, piping, excavation and structural foundations, civil site work, utility connections
and mitigation measures. Capital costs include primarily the unit construction costs, the cost of
land, installations (i.e., material and labour), compensation, process equipment, civil work,
piping, electrical connections, engineering, administration and contingencies.

Annual Operating and Maintenance Costs: Operating costs are on-going, periodic costs.
Operating costs include mainly the cost of labour, chemicals, energy (power demand), disposal of
waste residuals, replacement of worn equipment or pieces, cleaning and repairing equipment and
taxes. Similar to the capital costs, the operational and maintenance costs for a similar system may
differ from site to site depending on the site conditions (e.g., pumping cost for different distances
and elevations) and the quality of AMD (e.g., chemical costs, quantity of sludge and its disposal
cost).
 1.3 Development of Cost Estimate Models and Their Use

For a preplanning phase, capital and O&M cost estimates can be determined simply by
comparing the cost of a similar project which was previously executed and implemented to a site.
For other phases of a project, more detailed engineering calculations should be performed using
site-specific information. Degree of details used in calculations depends on the phase of the
project. Accordingly, levels of cost estimates in terms of accuracy and contingency allowance
differ from phase to phase varying from ± 45% to <10% (American Water Work
Association,1997; Montgomery, 1985).

The relative importance of these items vanes significantly depending on the specific
characteristics of the wastewater being treated and on the location and the quality of effluent to be
discharged. The models developed in this document aim to provide a cost estimate for planning
and feasibility phases by assessing alternatives. The expected level of accuracy may range as ±
45%, because the models do not specify site conditions and site-specific requirements such as the
cost of land and energy, and detailed engineering parameters for quality and quantity of AMD to
be treated and size and type of equipment to be selected. The cost estimate resulting from these
models may require further refinement for its applicability to different project phases and should
not be used for arranging project funding and securing engineering design services. If the use of
an estimated determined for these models is required, the estimated costs should be used with
caution allowing sufficient contingency in the budget.

2.0 METHOD

The main purpose of the present study is to develop cost estimating models that could provide a
general information on the cost of treating AMD at any potential site. Capital and operational
costs are sufficient to develop a cost-estimate model by comparing the cost of a similar plant that
was constructed and operated previously for treating AMD at a mining site.

2.1 Treatment Processes Considered for Comparison

The models consider the use of lime neutralization/ precipitation based AMD treatment facilities,
more specifically conventional and high density sludge (HDS) processes. Flowcharts for each
process are given in Figure 1 and Figure 2. Since the quality of AMD may range from site to site
as well as its quantity, the models developed have taken these variables into account and expected
to provide a reasonable cost information for a given type of AMD.

AMD Air Air

pH pH Flocculant

Lime Clean Water

Slurry

pH ~ 9.5 pH ~ 9.5
Sludge Wastage
%S ~ 2 - 5

Figure 1: Lime addition to neutralisation reactors: Conventional Method

 AMD Air Air
pH pH Flocculant

Clean Water

pH ~ 9.5 pH ~ 9.5
Lime
Slurry Sludge Wastage
Sludge Recycle %S ~ 10 - 30

Figure 2: Sludge recycled into lime slurry: High Density Sludge “HDS” Process (Boliden-Apirsa
Treatment Plant, Golder Associates, Ottawa Canada)

2.2 Cost Estimates Based on One/Sixth Rule

The “One/Sixth Rule” can be used to develop a cost-estimate tool for a general application that is
one of the methods often used to provide an estimate for capital and O&M costs based on the cost
of a system previously built and operated for a different site. This type of estimate is usually
performed using previous project experiences where data are factored up or down to reflect the
size and the treatment capacity of the new project. In addition, an inflation adjustment to cover
the elapsed time should be applied using appropriate assumed inflation rates or published indexes
(Cost of Unitary Processes, 2002). The resulting estimates may provide sufficient information on
the cost of building and operating a water treatment plant at the planning stage of the project.
The Equation 1 and 2 given below can be used to factor up or down the previous project costs to
make estimates for a similar plant with different capacity at a different site. The capital and
M&O costs can be determined using Equation 1 and Equation 2, respectively.

Capital Cost 2 = Capital Cost 1 x [(Capacity 2)/(Capacity 1)] 0.6 Eq.1

O&M 2 = O&M 1 x [(Capacity 2)/(Capacity 1)] 0.85 Eq.2

Where:

Capital Cost 1 and 2 = capital costs of the plant 1 and 2

Capacity 1 and 2 = capacity of plants 1 and 2 as the flow rate of wastewater (e.g., m3/h)
O&M 1 and 2 = operational and maintenance costs of plant 1 and 2

This method provides an estimate based the comparison of the quantity of AMD and does not
take the quality of the AMD to be treated. Since each site is unique requiring site-specific
systems and installations, the cost estimates obtained by this method requires further refinement
according to the conditions and requirements of the given site before its implementation. The
level of accuracy in this method may range between +50% to –30% and allowance for a large
contingency (e.g., greater than +30%) is required.
2.3 Inclusion of Inflation Rates

When comparing estimates for construction cost, the same basis of comparison should be used to
evaluate all the alternatives to the project future costs. Methods are commonly used for
projecting costs are: 1-) escalation based on assumed rate inflation, or 2-) published cost index.
The engineering News-Record Construction Cost Index (ENRCCI), published in the magazine
ENR (a McGraw-Hill publication). When possible, index values should also be adjusted to
reflect current local costs. For the purpose of comparison, the data in engineering reports and in
the literature can be adjusted to the “Current Cost Index (CCI)” using following relationship in
Equation 3. The CCI brings the cost of a project built in earlier years to the current time. As a
result, the “Capital Cost 1” in Equation 1 should be multiplied by the CCI giving Equation 4.

Current Cost Index = Current Value of Index/ Value of index at time of estimate Eq.3

Capital Cost 2 = (Capital Cost 1 x CCI) x [(Capacity 2)/(Capacity 1)] 0.6 Eq.4

For instance, the CCI for the years between 1994 and 2002 is found to be 1.295 (i.e., 1.3). The
capital and operational cost values given in a literature dated 1994 should be adjusted accordingly
before their use in feasibility calculations or before plotting cost estimate curves.

2.4 Development of Graphical Cost Models

As explained above, the cost of a similar project should be known to obtain estimates for capital
and O&M costs using the One/Sixth Rule. To provide easiness for the readers of the present
report, capital and O&M costs reported in the literature, which were previously prepared by
contacting mining companies to obtain information about the cost of their operating AMD
treatment plants were used (MEND, 1994). The information obtained from the literature was
grouped and tabulated according to the quantity and quality of AMD being treated in those plants.
Then, the information was plotted for the flow rate versus cost data to generate graphical cost-
estimate curves. Assumptions and the quality and quantity of AMD used to generate graphical
cost-estimate curves are given below.

Assumptions

Capital and operating costs included in the cost estimate models are given in Table 1.

Table 1: Capital and operational costs included in the cost estimate models

Capital Cost Items Operating Cost Items

• Building and foundation • Reagents
• Neutralization equipment • Flocculant
• Solid/liquid separation equipment • Operating labour
• Treatment facility services • Maintenance labour and consumables
• Polishing pond • Electrical power consumed
• Instrumentation and electrical components • Direct support costs at 10%
• Construction costs including overheads at 13% • Contingency at 10%
and engineering, procurement and project
management at 15%
• Miscellaneous spare parts at 15%
• Contingency at 25%
Items that are not included in the cost-estimate models are as follows:

• A site water (storm) management system;

• Site infrastructure including access roads, electrical power distribution to the treatment
facility, and support facilities/services;
• AMD collection system;
• Tertiary treatment system and pH adjustment system such as CO2 injection into the treated
water before its release;
• Site investigation and permitting; and
• Sludge disposal.

For comparing the cost of alternatives, it was assumed that disposal of 1 m3 of sludge costs US$4. The
volume of sludge to be generated is multiplied by US$4 and an estimate as to the cost of sludge disposal is
determined.

Assumed Quality and Quantity of Acid Mine Drainage

Since the total acidity concentrations take into account concentrations of common AMD metals
such as total iron, aluminium and manganese, the quality of AMD has been classified based on
the total acidity levels. Capital and operating costs of treatment facilities were modelled for both
conventional and HDS lime neutralization/precipitation processes for the following scenarios:

• Three different total acidity levels including low, moderate and high representing 50, 500 and
5000 mg/L concentrations in the raw AMD; and
• Three different AMD inflow rates including 55, 190 and 820 m3/h.

The volume of sludge that could be produced from each scenario was also estimated and given in
Table 3 and Table 5 for the conventional and HDS lime neutralization treatment processes,
respectively.

2.5 Capital and Operational Costs Existing Treatment Facilities

The capital and annual operating cost of a treatment facility for the selected AMD inflow rates
and total acidity concentrations are obtained from the literature and updated according to the
current cost index (MEND, 1994). The capital and annual operating cost of a conventional
treatment facility for the selected AMD inflow rates and total acidity concentrations are
summarized in Table 2. Table 3 summarizes the sludge volume and tonnage produced annually
by the conventional process for the selected AMD inflow and total acidity concentrations.

Similarly, Table 4 summarizes the capital and annual operating cost of HDS facility for the
selected AMD inflow rates and total acidity concentrations. Table 5 summarizes the sludge
volume and tonnage produced annually by the HDS process for the selected AMD inflow and
total acidity concentrations. Graphical cot-estimate curves using these tables were prepared and
given below.
Table 2: Conventional Treatment Facility Capital and Annual Operating Costs in
US$1,000

Inflow Rate Cost Inflow Total Acidity (mg/L)

(m3/hr) 50 500 5,000
55 Capital 740 960 1,130
Operating 140 190 435
190 Capital 870 1,045 1,390
Operating 190 340 960
820 Capital 1,830 2,100 2,900
Operating 460 790 3,650

Table 3: Conventional Treatment Facility Annual Sludge Production Rate as (m3/yr)

where 5% solids content was assumed

Inflow Rate Inflow Total Acidity (mg/L)

(m3/hr) 50* 500* 5,000**
55 480 4,800 72,000
190 1,660 16,600 249,000
820 7,200 720,000 1,080,000
*Tonne of acidity treated produces a tonne of metal hydroxide sludge
**Tonne of acidity treated produces 1.5 tonne of metal hydroxide sludge containing gypsum

Table 4: HDS Treatment Facility Capital and Annual Operating Costs in US$1,000

Inflow Rate Cost Inflow Total Acidity (mg/L)

(m3/hr) 50 500 5,000
55 Capital 1,130 1,310 1,570
Operating 170 220 460
190 Capital 1,570 1,740 2,100
Operating 235 390 1,050
820 Capital 3,400 3,650 4,440
Operating 560 870 3,,750

Table 5: HDS Treatment Facility Annual Sludge Production Rate as (m3/yr) where 25%
solids content was assumed

Inflow Rate Inflow Total Acidity (mg/L)

(m3/hr) 50* 500* 5,000**
55 480 4,800 72,000
190 1,660 16,600 249,000
820 7,200 720,000 1,080,000
*Tonne of acidity treated produces a tonne of metal hydroxide sludge
**Tonne of acidity treated produces 1.5 tonne of metal hydroxide sludge containing gypsum
2.6 Long-Term Cost Estimate

If long-term cost projection to be made for the assessment of alternatives, the volume of sludge to be
generated is multiplied by US$4 and an estimate as to the cost of sludge disposal is determined. Then, the
“Net Present Value (NPV)” calculations for the total cost of the treatment plant are obtained using the
following Equation 5.

NPV = A * [(1+i)n – 1/i(1+i)n ]

Where:
i: interest (or discount rate for the years considered for operation)
n: time (year, number of years considered for the operation of the facility)
A: annual treatment costs (i.e., O&M and sludge disposal costs)

The total cost of the project at that time for the projected time period is equal to the sum of the capital and
calculated NPV value. The NPV should be used for comparison of alternatives.

Conventional Lime Neutralization Operational

Costs
4000
3500
Cost US$1000

3000 5000 mg/L Total Acidity

2500
2000
1500
1000 500 mg/L Total Acidity
500 50 mg/L Total Acidityl
0
0 200 400 600 800 1000
AMD Flow Rate (m3/h)

3.0 CONCLUSIONS AND RECOMMENDATIONS AS TO THE USE OF MODELS

Based on the cost of previously built treatment facilities, cost estimate models could be
developed. The models developed in this document aim to provide a cost estimate for planning
and feasibility phases by assessing alternatives. The expected level of accuracy may range as ±
45%. The cost estimate resulting from these models may require further refinement for its
applicability to different project phases and should not be used for arranging project funding and
securing engineering design services. If the use of an estimated determined for these models is
required, the estimated costs should be used with caution allowing sufficient contingency in the
budget.
 Conventional Lime Neutralization Capital Cost
Estimates*

3500
5000 mg/L Total Acidity
3000
Cost US$1000

2500 500 mg/L Total Acidity

2000
1500
1000 50 mg/L Total Acidity
500
0
0 200 400 600 800 1000
AMD Flow Rate (m3/h)

*Does not include indirect costs

HDS Lime Neutralization Capital Cost Estimate*

5,000
5000 mg/L Total Acidity
4,000
Cost US$1000

500 mg/L Total Acidity

3,000

2,000
50 mg/L Total Acidity
1,000

0
0 200 400 600 800 1000
AMD Flow Rate (m3/h)

* Does not include Indirect costs

HDS Lime Neutralization Operational Cost Estimates

4000
3500 5000 mg/L Total Acidity
Cost US$1000

3000
2500
2000
1500 500 mg/L Total Acidity
1000
500
0 50 mg/L Total Acidity
0 200 400 600 800 1000
AMD Flow Rate (m3/h)
REFERENCES

American Water Work Association of Civil Engineers, 1997. Water Treatment Plants Design and
Construction. Mc-Graw Hill Publication.

Cost of Unitary Processes, 2002. Wastewater Treatment in Fishery Industry, Economic

Considerations. http://www.fao.org/docrep/003/V9922E/V9922E08.htm

MEND, 1994. Acid Mine Drainage Status of Chemical Treatment and Sludge Management
Practices. MEND Report No. 3.32.1.

Montgomery Engineers, 1985. Water Treatment Principles and Design. John Wiley Inter-
Science Publication.