Phoslock wins contract to treat Rio de Janeiro drinking reservoir, back to business in China

Phoslock Environmental Technologies ASX PET drinking water reservoir Rio de Janeiro Brazil
Under a new contract, Phoslock Environmental Technologies will treat one of Rio de Janeiro's main drinking reservoirs.

Phoslock Environmental Technologies (ASX: PET) has secured a $2 million contract in Brazil and has reported its Beijing office was back at work, with the company also expecting no delays or impact on its FY 2020 sales guidance as a result of the coronavirus.

The water treatment company has obtained a $2 million contract to treat one of the main drinking reservoirs with its patented Phoslock product in Rio de Janeiro.

Phoslock has already begun the process, which will continue for three months.

“With each successful application of Phoslock in lakes, dams and reservoirs, our ability to dramatically transform heavily polluted water bodies – even those suffering from eutrophication – adds to increasing global acceptance and demand for our services,” Phoslock chairman Laurence Freedman said.

The company pointed out there had been “substantial media coverage” of problems with drinking water in Brazil and internationally.

As a result, Phoslock anticipates its contract to treat the Rio de Janeiro reservoir will lead to more contracts to apply Phoslock to water bodies across Brazil and other countries.

China office reopens

Meanwhile, the company also reported its Beijing office was now open following the extended shutdown after the Chinese Lunar New Year celebrations due to the coronavirus outbreak.

In the World Health Organisation’s latest situation report dated 16 February, there were 51,857 laboratory confirmed cases of the virus.

The vast majority (51,174) of those cases are based in China, where it has caused 1,666 deaths.

Phoslock has also received government approval in the country to restart its factory, with production to ramp up over the next month.

The company pointed out is was not expected to begin any Phoslock treatments until either next month or April.

As a result, it does not expect any delays to its business activities or impact to its sales guidance for FY 2020.