Assessing the market opportunities of landfill mining

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Abstract

Long-term estimates make clear that the amount of solid waste to be processed at landfills in the Netherlands will sharply decline in coming years. Major reasons can be found in the availability of improved technologies for waste recycling and government regulations aiming at waste reduction. Consequently, market size for companies operating landfills shrinks. Among the companies facing the problem is the Dutch company Essent. Given the expected market conditions, it looks for alternative business opportunities. Landfill mining, i.e., the recycling of existing landfills, is considered one of them. Proceeds of landfill mining are related to, for example, recycled materials available for re-use, regained land, and possibilities for a more efficient operation of a landfill. The market for landfill mining is of a considerable size – there are about 3800 landfills located in the Netherlands. Given market size the company faces the dilemma of how to explore this market, i.e., select the most profitable landfills in a fast and efficient way. No existing methods or tools could be found to do so. Therefore, to answer to the problem posed, we propose a step-wise research method for market exploration. The basic idea behind the method is to provide an adequate, cost-saving and timely answer by relying on a series of quick scans. Relevant aspects of a mining project concern the proceeds of regained land and recyclables, the costs of the mining operation and the associated business and environmental risks. The method has been tested for its practical use in a pilot study. The pilot study addressed 147 landfills located in the Dutch Province of Noord-Brabant. The study made clear how method application resulted in the selection of a limited number of high potential landfills in a few weeks, involving minimal research costs.

Introduction

In recent years the amount of solid waste (SW) to be processed at landfills in the Netherlands has sharply declined. While landfills were used to store 13,000 kton of SW in 1993, figures for 2001 show a reduction to 6500 kton (AOO, 2002). Trend figures indicate a further decrease to 3000 kton in 2006 (VROM, 2002). Main drivers of this development are government regulations and tax policies that aim at waste reduction, together with new technologies that increase possibilities of re-use or recycling of products and materials. As a net consequence market volume for companies operating landfills shrinks.

Among the companies facing the problem is Essent. The company operates 11 landfills in the Netherlands. Together 2080 kton of SW was processed at these landfills in 2001. This is equivalent to a market share of approximately 32% (AOO, 2002). Given the perspectives on market development the company is initiating new services to guarantee its long-term survival. One of these services concerns landfill mining. Landfill mining, also addressed as landfill reclamation, is a process of excavating a landfill using conventional surface mining technology to recover e.g., metals, glass, plastics, soils, and the land resource itself. In addition to reclaiming valuable resources, the recovered site can then be either upgraded into a state-of-the-art landfill, closed, or redeveloped for some other suitable purpose (Morelli, 1990). As for the required resources and technology, landfill mining is a natural extension to the current activities of Essent.

The market for landfill mining in the Netherlands seems to be of considerable size – next to 30 operational sites, there are about 3800 closed landfills (Perrée, 2001). Rough estimates indicate a countrywide profit potential of about €150–200 mln (De Visser, 2002). However, the landfills are quite diverse with respect to location, size, and contents. Hence, costs and benefits of their mining may be quite different. It is likely that in many cases benefits will not outweigh the costs. The dilemma faced by Essent is how to find out the best business opportunities, i.e., landfills for which estimated profit would be the highest, in a fast and efficient way. Detailed research of a large number of landfills was not considered a valid option. This is mainly due to the high costs involved. For example, the required laboratory analysis of landfill contents is estimated at approximately €2000 per acre (acre = 0,4047 ha). Also data collection costs for getting familiar with local regulations, economic development programs etc. may be significant. Furthermore, the limitations set to company resources would make it impossible to explore the market within a reasonable amount of time. Therefore, it looked for a less costly and time consuming research methodology.

In this article, we present a research method for exploring and scanning the market for landfill mining as an answer to the question posed by Essent. The core of the method consists of two elements:

  • A categorization of costs and benefits associated with landfill mining projects.

  • A step-wise approach for establishing a set of profitable land fill mining projects.

The categorization is used as a starting point for identifying costs and benefits relevant for the set of mining projects under consideration. We assume this set to be restricted by a choice for a geographical region. Such a choice may have important implications for the relative weight of specific types of costs and benefits. For example, due to factors like the density of population or the availability of certain types of industry the proceeds of regained land or recyclables will differ significantly. Also costs of mining operations may be quite different due to e.g., geological circumstances, availability of qualified facilities and personnel etc. A generic description of costs and benefits in terms of a categorization guarantees flexibility of the method in this respect.

The first step in method application concerns the determination of an initial set of landfills to be considered for exploration. Next to geographical boundaries, see above, this set may be further restricted by criteria related to e.g., the contents of landfills. Subsequently, in a series of four steps the potentially most profitable landfills are selected. Each next step assumes a more precise insight in costs and benefits of projects considered, given the use of more elaborate research means. The basic idea is to arrive at a set of “high potentials”, i.e., landfills for which estimates indicate that profits and business risks meet company standards. Only these landfills candidate for a full investigation assuming extensive research means. Such an investigation should deliver reliable and precise information required for making the final decision on mining a site. This includes a thorough examination of the environmental risks associated with the mining process and business risks related to the possibility of pollution on or around the site.

To evaluate the practical use of the method a pilot study has been carried out for 147 landfills in the south of the Netherlands. The pilot was quite successful as the number of candidate landfills could be reduced with minimum research efforts to two.

The remainder of the paper is organized as follows: in the following section we will review related literature and outline research contributions. In Section 3, we describe the new research method in terms of the underlying framework of costs and benefits of landfill mining, its step-wise approach and management involvement. Subsequently, in Section 4, we discuss the pilot study. Finally, conclusions are summarized in Section 5.

Section snippets

Literature review

In this section, we relate our research to the literature. Starting from mining projects reported in the literature, we consider motivations for mining a landfill and the way the decision on whether to mine a landfill has been made. Next, we discuss tools that may support decision making on mining landfills. We conclude by stating our research contributions.

The pilot

To assess the research method for its practical use a pilot study was defined. The pilot study concerns a set of landfills in the region around the cities Eindhoven and Helmond in the Dutch Province of Noord-Brabant (see Fig. 2). The aims of the pilot study were to:

  • Illustrate the application of the method.

  • Test the method for its principal qualities: cost, speed and flexibility.

The first aim is related to the company’s wish for having a showcase that makes clear how market exploration can be

Conclusions and directions for future research

In this article, we propose a method for exploring the market for profitable landfill mining projects. The need for this tool follows from a more pro-active market approach taken by mining companies. Such an approach assumes an active role of the mining companies in selecting potentially profitable landfills for possible mining. Typically, the number of landfills to choose from will be significant – it may concern dozens or even hundreds of landfills. Given these numbers, the “classic solution”

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