[SCRAP INDUSTRY NEWS]

METAL MANAGEMENTGARNERS EMR’S INTEREST

European Metal Recycling Ltd., Warrington, U.K., has sent a letter to Metal Management Inc.’s board proposing a legal and financial due diligence study of Metal Management to pursue a business combination.

In the Aug. 8 letter, European Metal Recycling (EMR) said formulation of a specific plan or proposal for Chicago-based Metal Management is not guaranteed.

The letter appeared in an SEC filing. In the letter, EMR noted, "As we discussed today, we believe that a business combination of EMR and Metal Management would be in the best interests of Metal Management, its stockholders and EMR. As such, we propose that we and our advisors immediately begin a financial and legal due diligence review of the Company."

The firm said its plans for Metal Management may include privately negotiating transactions of Metal Manage-ment’s securities, open-market purchases, proposing a business combination including a merger, a tender offer or waging a proxy battle.

The filing added that EMR did not wish to make a hostile takeover attempt.

The letter concluded by noting that Metal Management experienced a significant run-up in its stock price after EMR purchased significant shares.

As of early June, EMR has owned 1.5 million Metal Management shares for a 14.8 percent stake in Metal Management, whose operations are almost entirely in the U.S.

EMR bills itself on its Web site as "one of the world’s largest recycling companies—and the largest in the U.K." It currently handles more than 8.5 million tons of scrap metal each year at 65 facilities, predominantly in the U.K., with a half dozen in Belgium and Germany.

In Saskatchewan, the burning of copper wire has the attention of the province’s Ministry of Environment, while in British Columbia, regional officials consider a flow control system on recycling as part of a larger waste disposal plan.

The Canadian Association of Recycling Industries (CARI), Ajax, Ontario, is contacting officials in both provinces to defend the interests of scrap recyclers, according to The Pulse newsletter circulated by that organization.

"For all of the well known potential environmental and health issues, burning is not an activity supported by CARI and its members," notes CARI in its newsletter. 

According to association executive director Len Shaw, CARI representatives have met with officials from the Saskatchewan Ministry’s Environmental Protection section in Regina in an attempt to help the province meet its objective without penalizing metal recyclers using best practices. CARI’s participation has been welcomed, says Shaw. CARI awaits the next proposal from the Ministry.

In British Columbia, the Regional District of Nanaimo is developing a Regional Waste Stream Management Licensing By-law, according to The Pulse.

CARI has written to the regional district, pointing out that while it supports the proper management of wastes destined for final disposal and recyclable materials to ensure the protection of the environment and public health, waste management and recycling are different industries. The group detailed differences in the sectors and the possible negative effects of applying waste regulations to the recycling industry—with no potential for environmental improvement. CARI has offered to work with Nanaimo and awaits a reply to its comments, Shaw says.