[Chinese Mainland] OriginWater Wins RMB 430 Million Bid for Ningdong Nanhu Reclaimed Water Plant: Comprehensive Utilization of Mine Water Resources, 25-Year Cooperation Period, Capped After-Tax Internal Rate of Return at 3.59%

Ningxia Hui Autonomous Region Public Resource Trading Network 2026 年 9 月 18 日 issued the bid award result announcement: for the "Ningdong Nanhu Reclaimed Water Plant Mine Water Resource Utilization Project" social investor tender of Ningdong Development Investment Co., Ltd., Beijing OriginWater Technology Co., Ltd. won the bid, with a bid price of 4.2971 亿 yuan. The project cooperation period is 25 年 (construction period 1 年, operation period 24 年), with a commitment that the financial internal rate of return on investment (after tax) shall not exceed 3.59%. The subject matter has changed from "treating mine water" to "mine water resource utilization," meaning that the energy bases in Northwest China are formally incorporating mine drainage water into regional second water sources for operation.

A single order of 4.3 亿, selling not engineering but 25 年 of water

The structure of this transaction is more worth examining closely than the amount itself.

• The tendering party is a platform company, not an environmental protection department — the owner is Ningxia Ningdong Development Investment Co., Ltd., and the tender agent is Ningxia Zhongyi Engineering Management Consulting Co., Ltd.; the tender subject is explicitly stated as a "social investor tender," meaning what is selected is a social capital party that funds construction and operates long term, rather than a mere general construction contractor.
• The timeline is tight — the project completed bid opening and evaluation on 9 月 14 日, and published the winning candidate announcement from 9 月 14 日 to 17 日; after the announcement period expired without objection, the bid was awarded and the winning result was published on 9 月 18 日, with the entire process taking only four days.
• The rate of return is written into the contract terms — the winning bidder commits that the financial internal rate of return on investment (after tax) shall be no higher than 3.59%, with a cooperation period of 25 年, including a construction period of 1 年 and an operation period of 24 年, and the quality standard is qualified.
• The investment amount leaves room for review — the announcement notes that "the final investment amount shall be subject to the final result reviewed by the tendering party," indicating that 4.2971 亿 yuan is the winning bid quotation and will still be adjusted according to the approved investment later; this is a common risk allocation method for long-cycle concession projects.

Looking at these points together, this is a typical low-return, long-cycle, operation-heavy asset: an after-tax rate of return ceiling of 3.59%, far below the return expectations of general engineering projects and closer to the public utility attributes of water infrastructure. Social capital is willing to take it on because it is betting on the stable cash flow over the 24 年 operation period and the value-added space of resource-based products.

Why mine water: a shift in framing from "hazard control" to "utilization"

The Ningdong Base is an important national energy and chemical base, located in an arid and semi-arid region with limited total water resources. Mine drainage water was long regarded as "wastewater" requiring discharge after meeting standards, and its treatment cost was a pure expenditure; but as regional industrial water demand continues to grow and newly added water withdrawal quotas become increasingly tight, the identity of this water has changed.

• Stable water volume and predictable source — mine drainage water does not fluctuate greatly with seasons like rainfall runoff, and for coal chemical and power users requiring continuous water supply, it is a rare stable water source, superior in this respect to most unconventional water sources.
• There is a clear treatment pathway for water quality — the core problems of mine water are high salinity, high hardness, and Suspended Solids / SS; the main treatment line is usually "pretreatment to remove Suspended Solids / SS + membrane desalination + necessary brine disposal," with high process maturity and controllable engineering risks, which is also the premise for investors to dare to quote a long-term return ceiling.
• The policy framing has already shifted — the Ecological Environment Code of the People's Republic of China explicitly states that the state encourages and supports sewage resource utilization, requires local governments at or above the county level to coordinate planning and build sewage resource utilization infrastructure, and incorporates unconventional water such as Reclaimed Water, harvested rainwater, desalinated seawater, mine water, and brackish water into the unified allocation of water resources. For the first time, mine water has been written into the resource allocation list alongside Reclaimed Water.
• Regional demand genuinely exists — the Ningdong Base gathers high-water-consumption industries such as coal chemical and power, with large demand for industrial cooling and process make-up water, while local tap water resources are costly and quotas are tight, so Reclaimed Water has a clear substitution space.

In other words, this project has transformed an "environmental cost item" into a "resource supply item." This is also the common logic behind the intensive launch of mine water projects in Northwest China over the past two years.

Three technical thresholds determine whether the project can run at full 25 年

The risk of a long-cycle project lies not in the construction period, but in the operation period. For mine water resource utilization projects, the following three points are the most telling.

• Pretreatment is the lifeline — Suspended Solids and hardness in mine water fluctuate widely. If the effluent stability of the coagulation-sedimentation and multi-media filtration units is insufficient, the downstream membrane system will experience irreversible Membrane Flux decline within a few months, directly eroding the returns of the entire project. During the design phase, a sufficient envelope analysis of water quality fluctuations must be conducted, rather than taking values based on average water quality.
• The destination of concentrated brine must be determined first — Membrane desalination inevitably produces concentrated brine, and its disposal pathway (evaporative crystallization, deep well reinjection, comprehensive utilization, or discharge) determines whether the project can achieve closed-loop operation. If there is no compliant outlet for the concentrated brine, the greater the capacity, the greater the risk — this is also the root cause of many mine water projects being "limited in production immediately upon completion."
• Membrane replacement costs must be amortized over the full lifecycle — A 25 年 cooperation period means membrane elements will undergo at least several rounds of replacement. If the bid price is calculated only based on construction-phase investment, without incorporating replacement cycles and flux decline into operating costs, returns will be significantly eroded in the mid-operational phase.

In addition, scaling and corrosion issues in high-salinity water impose higher requirements on pipe materials, pump and valve selection, and cleaning protocols; online water quality monitoring and metering are not only operational necessities but also the basis for settlement and regulatory compliance, and should be fully implemented in the preliminary design phase.

Two Insights for the Industry

The significance of the Ningdong order goes beyond a single project.

• "Wastewater" is being reclassified — Once mine water, Reclaimed Water, harvested rainwater, and brackish water are incorporated into a unified allocation, water utility companies no longer compete only with peers but also with "zero water intake" alternatives. Whoever can provide an alternative water source with lower comprehensive costs within the same region will secure their position.
• Long-term operational capability is more valuable than engineering capability — The combination of a 25 年 cooperation period and a 3.59% return rate cap is essentially a screening mechanism for operators. Engineering profits are one-time, while operational efficiency is compounding — this is the fundamental reason why enterprises with technical accumulation and operational experience continue to win bids.

Our Assessment

TIANYI TECH has long provided wastewater treatment and Reclaimed Water Reuse system solutions for municipal and Industrial Park clients. We believe that for projects such as mine water resource utilization, eighty percent of success depends on upfront water quality assessment and concentrated brine pathway planning, while only twenty percent depends on the treatment process itself. We recommend that owners and investors complete three tasks before bidding: first, collect a full hydrological year of comprehensive water quality analysis data to define fluctuation ranges; second, secure a compliant destination for concentrated brine before determining treatment scale; third, build a cash flow model for membrane replacement and energy consumption on a full-lifecycle 25 年 basis, rather than calculating only construction-phase investment. Only by solidifying these three tasks will the "second water source" not become a second sunk cost.

About TIANYI LIMITED: TIANYI LIMITED is deeply engaged in the fields of wastewater treatment and Reclaimed Water Reuse, committed to providing efficient, low-carbon, and sustainable water treatment solutions for municipal and industrial clients.