Wardco mining would like to expand operations in a west Texas region affecting a

Question

Wardco mining would like to expand operations in a west Texas region affecting a single small town. Expansion would put toxic chemicals into the groundwater that, if untreated, would make the water undrinkable. This is the only effect and, even then, the chemicals breakdown in about a decade.

a. A) If it cost Wardco $10million to treat the water and the value of mined products to customers is $20million, should Wardco be required to treat the water?

b. B) If it cost Wardco $10million to treat the water and the value of mined products to customers is $8million, requiring water treatment would kill the project. Should Wardco be required to treat the water in this case?

c. C) If Wardco could purchase and relocate all the town’s residents for $5million, should Wardco be required to treat the water?

Explanation / Answer

a. Yes, Wardco should treat the water as it is feasible to do so and sustainable development shall occur. b. No, treating water would cost Wardco more than the profits from the mine and hence it should avoid it or kill the project if treating water is necessary by govt regulations. c. Yes, relocation is feasible and if the majority of town people are happy with the relocation decison and compensation provided, Wardco could relocate the township.

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