Mining the rubbish buried by previous generations for valuable commodities has been a dream: now it's becoming a reality

As you'll know. mining digs out seams of valuable material from under the surface of the Earth. But what if that material was junk we had dumped into landfill sites over the last 50 years?

I'd heard of the concept before and it had a sci-fi appeal, set in a Mad Max-like future where, say, petrochemicals had become scarce and expensive. There's been mention of mining for gold from circuit boards and plastics before, always a decade away. But perhaps it's coming much sooner than that via a change of focus onto a commodity even more fundamental: energy.

The location will be a 50-year-old waste dump containing 17m tonnes of refuse in Houthalen-Hechteren, Belgium. British company Advanced Plasma Power signed a deal potentially worth €500m on Thursday with the site's operators Group Machiels to build a plant to mine the rubbish and convert it into a gas that can be burned for heat or electricity.

It would be the first commercial application of APP's technology, although another planned plant next to a Norwegian paper mill could beat it into operation. There are also four possible projects in the UK.

Simon Merriweather, APP's CEO, explained to me how the process works. First any waste that can be recycled is: the dump has been used since the 1960s, long before recycling was common. The remaining rubbish is vaporised at 850C before a plasma arc - a continuous lightning bolt in effect - breaks down the toxic tarry chemicals in the brew. The result is a hydrogen-rich synthetic gas.

So it's like incineration, I ask. "Absolutely not," says Merriweather. When the gas is burned it creates no more pollution than a normal gas-powered plant, he says.

"if you look at the different options, landfill is on the way out," says Merriweather, as space runs out and taxes rise. "With incineration, so many people are uncomfortable with it from a health point of view." And anaerobic digestion, while good for food, would choke on plastics.

The power produced is steady, not intermittent like solar and wind, and Merriweather calls it renewable. It seems to tick a lot of boxes: energy from waste, reducing landfill, dealing with toxic emissions.

But is it really renewable? There's a lot of rubbish in the world, but it's finite. Also, would it be better in terms of greenhouse gases to leave the tips untouched? No, says Merriweather. The landfills generate methane - a potent greenhouse gas - which can tapped but not completely.

If the plant gets going, perhaps in two to three years, APP think this it will be the first time landfill mining has been used on a commercial scale for energy, though I'm sure you'll tell me of any other projects. Other companies are certainly exploring plasma technologies for turning garbage into power, such as AlterNrg, Plasco and Europlasma.

One challenge for the future, as noted in a previous Guardian story on APP, are the risks of excavating sites where the contents of the site are unknown.

Nonetheless, I'm finding it hard not to like this concept a lot. Anyone beg to differ?

Update 31 May 2011: As I promised in the comments, I have got replies from Simon Merriweather to some extra questions:

Q: Will the greenhouse gas emissions emitted by the APP plants be less than if the landfill had been left alone?

A: Yes, the landfill site would have emitted significant amounts of methane over the length of the project.

Q: What happens when the landfill is exhausted after 20 or so years?

A: The site will be returned to its former greenfield state – for the community to enjoy.

Q: Is breaking into old waste not fraught with pollution dangers?

A: Extensive testing has been undertaken on the site and Group Machiels have records of the waste in the landfill. Group Machiels has world-class experience in waste management and waste handling is critical to the safe mining of the waste.

Q: What price can you sell the electricity at? Does it need subsidy?

A: The price of electricity sold is crucial to the commercial success of the project, is commercially sensitive and is subject to negotiation.