Urban mining combines technology, resources and environmental policies
The three year old smartphone that you threw away did not disappear. When you replaced the 56 inch television screen with the 72 inch, the old screen didn’t evaporate, either.
Those small items, combined with millions of other individual disposals, make up a growing global mountain of trash that is accumulating rapidly called electronic waste.
Every year 25-30 million tons of electronic waste (“e-waste”) is generated worldwide, a number which is due to double, according to EU estimates, by 2030. Most of that waste still comes from the rich world, however, Asia and Latin America are rapidly coming up the charts. India is lagging, but with hundreds of millions of mobile phones now in circulation in India, it too will be a major producer of e-waste in the years ahead.
While e-waste has long been categorized as hazardous material, until 2010-12 hardly any international agreements existing on the handling of this material. The developed economies, if they had rules to prevent e-waste being buried in landfills, often exported it in bulk to countries which had no rules, so that dumped e-waste would be picked through by locals in poor countries – often children – to extract valuable elements, and the rest, including plastics, aluminum, heavy metals and ceramics would just become mountains of trash, leaching into the soil and, eventually going into the water tables or is washed out to the ocean.
However, e-waste includes copper, lead, zinc, nickel, tin, gold, silver and platinum group metals (platinum, palladium) as well as steel and aluminum. The recovery of the high value products, on a systematic and industrial scale not only can be lucrative, but because it absorbs the low value plastics (some processing systems use the plastics as a fuel to heat the metals) it can keep more plastic out of the environment as well.
The business of processing this waste is still embryonic. Among large, integrated plants that process this e-waste, there are six notable players. The largest is Belgian company Umicore, followed by Swedish Boliden (72,000 tons a year processed in 2019), German firm Aurbis AG, which handels 50,000 tons a year at its Lünen site, Japanese firms Mitsubishi Materials (170,000 tons), Dowa Holdings (30,000 tons) and LS-Nikko (10,000 tons).
Beyond these are a number of small scale operators, which collect and process local waste.
This combined processing capacity today does not make much of a dent in 25 million tons – and rising – of new waste generated annually.
What are the elements holding this back? The first one is the low tech issue of logistics. To collect, transport and deliver e-waste is a non-trivial problem. Some places have rules about how one can dispose of surplus electronics, but even in those areas it is hard to enforce a rule that is made up of millions of individual actions. People do not have an incentive, beyond environmental sensibility, which is not universal, to make the extra effort to follow regulations.
The second, related problem is that all e-waste is not created equal. By weight, a DVD player is 62% steel, 5% copper and only 15 parts per million gold. A mobile phone is 56% plastic, 13% copper and 350 parts per million gold (1300 parts per million silver and 200 ppm palladium.) By value precious metals make up 47% of the recoverable material in a DVD player, and 93% of a mobile phone. The best “trash” is printed circuit boards (PCBs) which are 90% copper and precious metals, but it is necessary to physically remove these from desktop, tablets or laptop computers or other units which include them, and that is hard to do without some by hand action.
Sorting the waste into higher and lower value tracks, and providing processing lines that are appropriate for the different sorts of material that make up the waste stream is a work in progress. Solving this sorting problem on an automated and large scale basis will be necessary to begin to catch up with the tidal wave of e-waste that is being produced.
Interestingly, the technology of the mining industry, normally the co-equal bete-noire of the green movement, is being applied to deal with the e-waste problem. Technologies which are used to sort ore or diamonds using ultra violet scanning is being applied to sorting e-waste. Of the current list big e-waste processors mentioned above, all use various processing techniques from conventional smelting and refining. Two of these firms – Umicore and Aurbuis – employ an integrated smelting technology developed by Glencore.
If one just looks at the gold and silver value of the 25 million tons of e-waste, making conservative recovery factors, this is over $10 billion of annual value. This does not include the other valuable metals, which would add billions of Dollars to the potential prize. Going forward, forgone value of this size should get the attention of tech/green entrepreneurs.
Not unexpectedly, a number of start ups are addressing this potential. Firms such as Environleach, in Canada, which has developed a way of leaching metals from PCB waste using a non-toxic leach agent, in place of cyanide or acid. Recently Blue Lakes was introduced to a private company called Nugreen, which is currently looking for $12 million to construct the first integrated e-waste processor in the United States. The US, for all its economic scale, has a much lower re-cycling rate than in Europe and Japan.
Given the scale and global nature of the problem, expect this space to be a major growth sector.
Michael Colligan,
Partner, Private Equity