Just for comparison, here's how real tunneling companies deal with sludge.[1] There's a small portable plant that separates sludge from water. It's about the size of two shipping containers. The water usually gets re-used in the tunneling operation.

The Boring Company, on the other hand, has been dumping their wet sludge on a vacant lot near a mall and waiting for the sludge to dry out. The mall doesn't like that. Nor does the city of Las Vegas, now that they found out.

[1] https://www.youtube.com/watch?v=mCctmBUHIMo