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* CEO expects revenue to double by 2020 in metals, mining
* Sees tighter regulation driving growth
* Veolia's 2013 mining water recycling revenue 700 mln euros
* Wants to boost miners' revenue, not just be a cost factor
PARIS, April 8 (Reuters) - France's Veolia Environnement expects its revenue from treating waste water from the mining and metals industries to double to 1.5 billion euros ($2.1 billion) by 2020, as it seeks a growing share of an expanding market, its CEO said on Tuesday.
Antoine Frerot said mining was one of several industries being targeted by the water and waste group in order to secure half its revenue from industrial clients in coming years - from about a third today - as margins and revenue shrink in its traditional municipal water business.
Frerot said pretax margins in mining waste-water recycling are around 10 percent, which he said is higher than the narrowing margins in its French water business.
He said the mining and metals industry is the world's second-biggest user of water, after agriculture, with companies globally using as much as U.S. domestic consumers as they pump water into ore deposits to help extract minerals.
Frerot said 70 percent of new projects by the big six mining companies were in regions suffering water shortages and he saw tightening environmental regulation as the main driver of growth. But Veolia also wanted to win business by recovering minerals from the waste water, he said at a strategy briefing.
"We treat their waste water, we are the last wheel of the wagon for them, a cost that is increasingly mandatory because of tightening regulation," Frerot said.
He said Veolia's challenge is to become not just a cost for miners, an industry whose leading players include Rio Tinto and BHP Billiton, but to help them generate more revenue by recycling raw materials from waste water and help them win operating permits by integrating water recycling procedures from the start.
Veolia estimates the global market for water, waste and environment services to the mining and metals sector will grow to more than 20 billion euros in 2020, from between 13 and 14 billion currently. It also hopes to increase its share of that market from 5 percent to between 7 and 8 percent.
Frerot said Veolia's only global competitor is French peer Suez Environnement, though both vie with big regional water treatment players such as General Electric in the United States, Osmoflo in Australia and Japanese groups Kurita Water and Ebara Corp.
Total annual revenue of the mining and metals sector is about 700 billion euros per year, Frerot estimated.
Miners not only use a lot of water, but also produce huge quantities of waste water.
"Until recently, in most countries in the world, this was discharged in the environment without treatment," he said.
A chart of mining firms' water use put together by Veolia showed that Brazil's Vale uses 1.58 billion cubic metres of water per year, nearly as much as the 1.82 billion cubic metres of drinking water consumed by eurozone citizens per month. Most of that water, 1.23 billion cubic metres, is recycled, the rest is sourced directly from the environment.
The second and third-biggest water users, Rio Tinto and Glencore Xstrata, each use more than 1 billion cubic metres, which is nearly as much water as flows over the Niagara falls per week.
Unlike Vale, they use much more water directly from the environment.
Veolia Global Mining and Metals director Christopher Howell said the percentage of recycled water the companies use is not just a function of how virtuous they are, but depends more on whether the ore is mined in a wet or dry environment.
He said one example of Veolia making money for mining clients rather than being a cost is Spain's Iberpotash, which created 45 million euros in additional revenue as it recovers white potash and salt from the facility's effluents.