5 ASX Water Treatment Stocks to Watch

Canaccord highlights five ASX-listed companies providing innovative water treatment solutions to help address the water scarcity issue.

Fresh water is essential for life, but it is a scarce resource, with less than 1 percent of the world's water supply estimated to be fresh water readily available for humans.

Increased demand from a rising global population, climate change and associated water pollution are likely to see already scarce freshwater resources become even more stretched in the near future.

For Canaccord Genuity, these water quality trends are likely to continue, and will underpin large addressable global markets for water treatment solutions, which are key to help offset clean water scarcity by treating and ultimately reusing more water.


“Treated wastewater is increasingly seen as a reliable alternative to conventional water resources," analysts at the firm told their investor audience in a note. “There are now many processes that can treat wastewater to almost any standard, whether it be to produce drinking-water quality, or to a standard necessary for re-use in industry, or to a level required for safe disposal."

In the report, the firm highlights five micro-cap ASX-listed water treatment stocks to watch that are providing innovative solutions to help address the water scarcity issue.

Here, the Investing News Network takes a look at what these five companies are all about. All data was current as of June 18, 2020, and companies are listed in alphabetical order.

1. Calix (ASX:CXL)

Current stock price: AU$0.76; market cap: AU$112 million

Calix's core technology is being used to develop more environmentally friendly solutions for advanced batteries, crop protection, aquaculture, wastewater and carbon reduction. The company has operations in Australia, New Zealand, the US, Europe and Asia, and currently generates sales from commercialised products for water treatment and sewer protection.

According to Calix, its technology provides benefits such as a safe and cost-effective way to manage odour and remove contaminants in wastewater, greater yields in aquaculture and agriculture, improved batteries at lower costs and an enhanced ability to meet emissions targets.

“Subject to exchange rates, Calix expects total sales revenue for FY20 to be within the range of AU$12.5 million to AU$14 million , representing a 3.8 to 4.2 times uplift from FY19," the Canaccord analysts said. “The watchpoint on sales is the SE Asian region, where the impact of COVID-19 is yet to be determined."

2. De.Mem (ASX:DEM)

Current stock price: AU$0.16; market cap: AU$26.3 million

An Australian-Singaporean decentralised water and wastewater treatment business, De.Mem designs, builds, owns and operates turnkey water and wastewater treatment systems for its clients.

Operating in the industrial segment, it provides systems and solutions to municipal and residential customers from the mining, oil and gas, electronics, chemicals and food and beverage industries.

“With about 60 percent of revenues currently sourced from Queensland, the company is initially focused on expanding its presence throughout the Australian market," the report notes. “The company believes the size of the addressable market for its offering in Australia is around $200 to $300 million."

3. Fluence (ASX:FLC)

Current stock price: AU$0.26; market cap: AU$156.21 million

Fluence is focused on the decentralised water, wastewater and reuse treatment markets. It offers low-cost, fast-to-deploy water and wastewater treatment products that solve local water shortages.

The market for decentralised systems utilising pre-engineered water and wastewater treatment/reuse products is estimated to be worth $13 billion, according to Global Water Intelligence, with demand for smart packaged water plants growing globally.

“Fluence is targeting geographies that urgently need wastewater treatment solutions and/or are urgently addressing extreme water shortages," the Canaccord analysts said.

Fluence has established operations in North America, South America, the Middle East, Europe and China, and has experience operating in over 70 countries.

4. Phoslock Environmental Technologies (ASX:PET)

Current stock price: AU$0.36; market cap: AU$215.63 million

Phoslock Environmental Technologies is an international environmental company specialising in engineering solutions and water treatment products to remediate polluted lakes, rivers, canals and drinking water reservoirs.

Its leading product, called Phoslock, was developed by the Commonwealth Scientific and Industrial Research Organisation to significantly reduce excess phosphate safely from the environment and in turn reduce the growth of harmful algae. Phoslock is certified to be used in drinking water in North America, Europe, the UK, Brazil, Australia and China.

The company has a purpose-built production facility in Changxing, China, with a capacity of 20,000 tonnes per year and expansion plans in the works.

“The addressable market for PET is significant," Canaccord's report reads. “In China, the government has allocated over US$1 trillion in the latest five-year plan to address water, air and soil pollution."

5. SciDev (ASX:SDV)

Current stock price: AU$0.58; market cap: AU$89.45 million

SciDev is focused on the separation of solids from liquids in a variety of industries, including mining, water treatment, oil and gas and construction.

“SDV has stated that it has a strong growth pipeline and believes it is well positioned to deliver sustainable growth," Canaccord said. “SDV also could expand into adjacent industries that have a need for solids-liquid separation, including dairy, food & beverage, paint, waste management and cosmetics."

Don't forget to follow us @INN_Australia for real-time updates!

Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.

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Gold isn't all that glitters in the land down under — silver in Australia is a major industry, and the country is home to both large and small players.

When it comes to precious metals, Australia has long punched above its weight — the nation was born riding the wave of a gold rush.

Gold isn't all that glitters through — Australia is also a major global producer of silver. It's among the 10 top producers, and was ranked seventh in 2020, with 1,300 tonnes coming from the many operational mines in the country. By comparison, the world's top producer, Mexico, produced 6,300 tonnes that same year.

Other key players in the silver market are Peru, China and Russia, which produce more silver than Australia, and the US, Argentina and Bolivia, which produce less.


Australia is sitting on quite a lot of the precious metal, with the world's second largest reserves, behind only Peru.

According to Geoscience Australia, one of the country's first mines was a silver-lead mine near Adelaide. Since then, the entire continent has been combed over with a fine-toothed comb, with deposits identified in every state and territory and active mines in every jurisdiction but one (Victoria).

Overall, Australia is well explored when it comes to silver, and since the mid-1800s it's had a constant stream of silver production. Aside from that, the country boasts metals-processing facilities in South Australia that separate the precious metal from its commonly mined counterpart metals, lead and zinc.

Silver companies in Australia

Those looking at the Australian silver market have options. There are plenty of big players with interests in Australian silver, and many smaller players for investors to consider researching too.

Most silver comes from mines dedicated to other metals — Glencore's (LSE:GLEN,OTC Pink:GLCNF) Mount Isa in Queensland produces mainly copper, zinc and lead, but silver is separated by the company's integrated processing streams. Glencore also operates the McArthur mine in the Northern Territory, which is primarily zinc, but between its copper and zinc assets, Glencore produced 7,404,000 ounces of silver in Australia in 2020 — over 200 tonnes.

Elsewhere, BHP (ASX:BHP,NYSE:BHP,LSE:BLT) produces a lot of silver as well at the Olympic Dam operation in South Australia. Perhaps best known for the production of uranium and copper, it also yields significant silver resources to the tune of 984,000 ounces in 2020 (or almost 28 tonnes).

According to Geoscience Australia data from 2016, over 20 mines in Australia produced silver in that year, while there are dozens of other resources identified in each state.

A primary producer of silver is the Cannington mine in Queensland, where South32 (ASX:S32,OTC Pink:SHTLF), a company that was spun off from BHP in 2015, mines silver and lead. Cannington is a big one, producing 11,792,000 ounces in 2020, or 334 tonnes of silver.

Tasmania boasts the Rosebery mine, which has seen 85 years of continuous operations and is currently owned by MMG (ASX:MMG,HKEX:1208). Rosebery, like all the others here, is polymetallic, and besides silver also produces copper, zinc, lead and gold. MMG also has the Dugald River mine in Queensland which also produced silver.

Getting into smaller companies, there are those like New Century Resources (ASX:NCZ) which restarted the Century mine in the Northern Territory for zinc and silver.

The future of silver in Australia

So, you get the picture — there's a lot of silver to be mined in Australia by way of mining everything else.

It's worth noting that because silver operates both as a precious and an industrial metal, and is mined most often alongside base metals, it can be pulled in many directions. However, it traditionally follows (and lags behind) its precious metal sibling, gold, making it a valuable investment commodity to keep an eye on.

Looking forward, the future of the commodity in the land down under — especially given Australia's significant reserves and operator diversity — is as bright as you'd like it, and depends on what investors are most interested in, given the by-product nature of the metal.

Don't forget to follow us @INN_Australia for real-time updates!

Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.

Australia took a stand against Facebook and Google earlier this year, and the move could have long-term implications for tech investors.

It was a ban that sent Australians wild and had the whole world watching.

Back in February, Facebook (NASDAQ:FB) stopped users in Australia from posting news in a week-long blackout, reacting to proposed legislation that would have forced the social media behemoth to pay publishers for content.

What prompted Facebook to "friend" Australia again, and what are the potential long-term implications of the squabble? Read on to learn what tech-focused investors in Australia should know about the situation.


Australia squares off against Facebook

On February 25 of this year, Australia's federal government passed the News Media and Digital Platforms Mandatory Bargaining Code. It was developed after extensive analysis by the Australian Competition and Consumer Commission, and is aimed at ensuring that news media businesses are fairly remunerated for their content.

It stipulates that digital platforms such as Facebook and Google (both named in the documentation) must pay news outlets whose content they feature — for example, if content is shared on Facebook or shows up in Google search results. The idea is that this will help to sustain journalism in Australia.

Unsurprisingly, Facebook and Google didn't react well to the code, which was first introduced in 2020.

Google didn't make any moves after it passed, but Facebook quickly made it impossible for Australian users to share news content, and pages for both local and international news organisations went blank — a major concern given the COVID-19 and wildfire concerns that were circulating at the time.

Australian Prime Minister Scott Morrison was scathing about Facebook's decision — which he ironically shared in a Facebook post — declaring the tech giant's actions "as arrogant as they were disappointing." He added, "These actions will only confirm the concerns that an increasing number of countries are expressing about the behaviour of BigTech companies who think they are bigger than governments and that the rules should not apply to them."

Despite strong feelings from both Australia and Facebook, the dispute was resolved fairly quickly, with the country agreeing to make four amendments to the legislation and Facebook restoring Australian's access to news.

Implications for Big Tech and news organisations

Both Australia and Facebook have claimed victory in the dispute, with a Facebook representative saying the company will be able to decide if news appears on the platform — meaning it won't automatically have to negotiate with any news businesses. Changes were also made to the arbitration process.

Tech experts have pointed out that larger news companies may ultimately benefit from the changes, but smaller ones could be pushed to the side. Major publishers that have struck agreements with tech giants, such as News Corp, Nine Entertainment (ASX:NEC,OTC Pink:NNMTF), Seven West Media (ASX:SWM) and Guardian Australia, may be able to increase their market share while smaller independent players lose out.

A business that is in full support of the laws is Microsoft (NASDAQ:MSFT). During the conflict, President Brad Smith came out loudly in favour of Australia's law, and advised that his company is willing to step up with search engine Bing should Google and/or Facebook pull out of the Australian market.

"In Australia, Prime Minister Scott Morrison has pushed forward with legislation two years in the making to redress the competitive imbalance between the tech sector and an independent press. The ideas are straightforward. Dominant tech properties like Facebook and Google will need to invest in transparency, including by explaining how they display news content," he said in a blog post.

"The United States should not object to a creative Australian proposal that strengthens democracy by requiring tech companies to support a free press. It should copy it instead."

Global reach and tech investor impact

Six months down the road from Australia's landmark legislation, it's tough to say what the long-term impact may be.

That said, market watchers do believe the country is part of a new precedent of forcing Big Tech into paying for journalism — something giants Facebook and Google are not used to.

Countries looking to pursue similar legislation include Canada, where Facebook agreed in May to pay 14 publishers to link to their articles on its COVID-19 and climate science pages, as well as other unspecified use cases. Canada is pursuing other avenues too. Meanwhile, in France, Google said it will pay publishers for news content after the country took up new EU copyright laws that make digital platforms liable for infringements.

For investors, the takeaway is perhaps that while companies like Facebook and Google may seem too big too fail, they too can fall subject to new regulations that can change how they do business. As nations around the world look to take back control from these mega companies, it's important to be aware of possible effects on their bottom lines.

Don't forget to follow @INN_Australia for real-time updates!

Securities Disclosure: I, Ronelle Richards, hold no direct investment interest in any company mentioned in this article.

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