Companies like BHP Billiton and Rio Tinto produce a mountain of gold, silver and other precious metals. But what many people forget is that they also create a similarly bumper amount of toxic and contaminated soils, industrial and hazardous wastes.
Enter Tox Free Solutions, a nimble player in the waste management solutions industry, which has carved a lucrative business from catering to the needs of the mining, oil and gas sector.
The space in which Tox Free operates is white hot at the moment as is evident from the fierce, billion-dollar bidding war for control of Brambles' Cleanaway Australia business this week.
Its fortunes are being further bolstered by the resources boom: the more companies pull out of the ground the more waste they create.
Tox also provides remediation and recycling solutions for contaminated water and has two extensive treatment facilities located at Port Hedland and Kwinana.
The Port Hedland facility is particularly well placed to deal with industrial waste generated by the massive Pilbara region. The company also owns two hazardous waste treatment licences, which are not easy to come by.
Tox Free was floated during the dotcom boom and investors have had to be very patient to see a return.
But this week the company finally turned the corner, unveiling a profit upgrade to $4.8 million EBITDA for 2005-06, and an acquisition. It will purchase Grime Fighters, a waste management group based around the goldfields of West Australia. Tox's share price has rebounded more than 30 per cent from its six month low of 9.6¢ and on Friday closed up 0.5¢ at 13¢.
Given Transpacific Industries missed out on buying CleanAway this week and the sector is ripe for consolidation, it might not be too long before Tox Free pops up on buyers' radars.
TOX Price at posting:
0.0¢ Sentiment: Buy Disclosure: Not Held
