What the Water Industry Can Learn From Quarrying and Mining

In its’ 2025–2030 business plan, Severn Trent noted that “all innovation can be radical and/or disruptive, even if the technology has existed for years.” For the UK water industry during AMP8, some of the most radical “innovations” may not come from a legacy brand, but from the experience of parallel challenges that the quarrying and mining sectors have perfected over decades.

Companies like Severn Trent are increasingly recognising the value in tapping into experience gained outside of the Water domain, seeking new entrants in both their recruitment and supply chain.

As specialists in pump systems for abrasive wastewater, Atlantic Pumps has seen firsthand how solutions proven in mineral extraction are now solving the water industry’s most persistent challenges. The secret is not just in the material specifications – it’s in the mindset.

Beyond the TOTEX “Single Pot”

Introduced in AMP6 to curb CAPEX bias and Regulatory Capital Value (RCV)-driven spending, TOTEX shifted the industry toward outcome-based flexibility. However, a single expenditure “pot” can obscure the finer details. To drive real efficiency improvement in AMP8, we must now deconstruct TOTEX to pinpoint the specific underlying cost drivers.

TOTEX includes capital expenses, operating costs (spares, downtime, energy), and final ‘exit’ value. Factoring in these lifetime expenses helps make financially sound, realistic decisions. Whether it’s a large-scale development or a “quick win”—like replacing a single pump with a higher-efficiency model—the goal is the same: freeing up resources for the next improvement.

Splitting TOTEX down again, and again: CapEx, OpEx, BotEx, DevEx…

A granular breakdown of TOTEX down allows us to move from reactive ‘firefighting’ to strategic asset management. Terms like BotEx (business-as-usual) and DevEx (enhancement) emerged in AMP7, which help us focus on reducing costs while investing in improvements.

DevEx is notoriously challenging to model, as its innovative nature means that the regulator and industry at large lack sufficient benchmarking data. This enhancement spending can also straddle CapEx and OpEx, making comparisons between water companies difficult. Case studies and experience from other industries that have similar challenges can help fill in this ‘unknown’. Mining companies are experienced in managing upfront development costs, mitigating risk while maximising longer-term outcomes. At a tactical level, they also face similar challenges in abstracting and discharging water – especially with entrained and abrasive solids – and controlling environmental outcomes.

Grit is an out-sized cost driver in many WwTPs and Bioresource systems—so much so that we believe it deserves its own ‘pot’: GRITEX. By isolating the costs associated with grit—from accelerated wear to energy drag—we can justify the “DevEx” required to implement proven grit-handling technology from the aggregate sector.

The most familiar terms, CapEx and OpEx, are to some degree, artificial classifications. Think of it this way: the same piece of equipment can be accounted for as either category, depending if it is purchased or hired. While this is important for accounting and reporting, it doesn’t really help in making the best long-term decision between two competing solutions.

Into AMP8, and the industry is facing criticism that it has under-invested, which, as Yorkshire Water and others predicted would happen, back in 2019, pushed the “cost of resilience and climate change on to future customers”. With the slightly increased headroom in PR24, the industry wants to make the best investments for AMP8. What lessons can we adopt from other primary industries?

From Affordability to ROI: What Water can implement from the “Mining Mindset”

In the UK water industry, investment decisions have historically been hampered by the arbitrary “Affordability” barrier. When a project is put out to tender, the gravity often pulls toward the lowest initial CapEx. While this satisfies the immediate budget constraint, it often ignores the asset’s long-term cost reality.

In the Quarrying and Mining sectors, the philosophy is subtly different. They don’t look at what a pump costs to buy; they look at what it costs to run over a 5-to-10-year horizon. This is the Life Cycle Cost Analysis (LCCA) or Total Cost of Ownership (TCO). Its not too far removed from TOTEX, but the rigour and focus can be different.

Example of TCO in practice: Maintenance and energy OpEx can amount to over 10 times the CapEx on powered equipment such as pumps. A ‘low-bid’ pump option means initial savings can erode as quickly as its wear parts do.

Fundamental to progress in the water industry is attracting long-term investment, an area where the mineral mining sector excels. Here, LLCA and TCO aren’t just standalone decision methodologies; they are part of the ROI (return on investment) calculation. Dividing the total lifetime costs by the value added, such as ODI awards or bio-energy generation, can show water investors the ROI – the final metric that builds resilience and attracts investment long-term.

The rigour of the LLCA model brings clarity to decision-making that the conventional scorecard lacks. Which is the best value and lowest risk over 5 years, 10 years?

Capitalising on decades of wastewater management in parallel industries such as quarrying and civil engineering, the water industry is applying proven, low-risk techniques in an innovative yet low-risk way.

The Mindset Shift

CapEx only “Affordability” Approach	Total Ownership Cost/ROI Approach
Focus: lowest purchase cost	Focus: minimising “cost per megalitre”
Approach: Short-term, reactive	Approach: Medium to long-term stability
Outcome: Higher BotEx/OpEx	Outcome: Predictable, low-maintainance. Time-saving resilience.
Risk: high compliance risk from unpredictable downtime. Opex budget overshoot.	Risk: Accounted for upfront, early on in the AMP investment cycle. Reduced asset depreciation by better specification.

 

The water industry cannot afford to operate on a business-as-normal basis. With a clamouring public and the AMP8 clock ticking, time is not on our side. By adopting tried-and-tested technologies from parallel industries, we can hasten the outcomes that we all want: sustainability, resilience, stability, and value.

Ready to partner?

Atlantic Pumps brings decades of experience from the world’s harshest mining environments to the UK water sector. We don’t just supply pumps; we help Asset Managers identify the long-term ROI that turns ‘expensive’ upfront costs into significant 3-5 year savings. Contact our Water Assets team for a strategic consultation.