All that Glitters . . .

If scrap is “a mine above ground,” as the industry adage holds, then a major ore deposit was recently tapped by Handy & Harman Refining Group Inc. (HHRG), South Windsor, Conn.

The company, one of the largest precious metals refiners in North America, has signed a major contract with the U.S. Department of Defense (DOD) that will see it greatly increase its intake of computer and electronic scrap items.

The stream of obsolete computer, telecommunications, and other electronic equipment has become one of the most important above-ground veins that can be mined by precious metals refiners.

THE CENTURY CLUB

Handy & Harman’s roots go back more than 130 years to its origins as a precious metals bullion and coin trading firm. The company has been refining precious metals for more than 100 years.

The company’s longevity can by no means be attributed to a presence in a static industry—at least not recently. While jewelry remains a part of the overall precious metals industry (and the part that most members of the public are familiar with), the industrial and electronic eras have brought about new and ever-changing uses for gold, silver, platinum and palladium—the four metals refined by HHRG.

Change has also come about for Handy & Harman in the form of acquisitions and expansions in the early part of this decade, followed by a sell-off of some assets and operations three years ago.

In 1996, the company known simply as Handy & Harman sold off its precious metals recycling and refining operations to Golden West Refining Corp. Ltd., an Australian-based precious metals refining company.

Those portions of the business that were not sold to Golden West—primarily specialty manufacturing operations using metals such as stainless steel and precious metals—still operate under the name Handy & Harman as part of WHX Corp., a New York-based conglomerate whose operations include the Wheeling-Pittsburgh Steel Corp.

HHRG, as part of the Golden West Refining Group, has remained one of the world’s largest gold refiners and has also become one of North America’s largest processors of obsolete electronic and computer equipment.

A REFINED MARKET

Recyclers of precious metals are quick to note that their tradition probably goes back as far as any recycling industry’s roots. Ancient civilizations melted down obsolete gold and silver objects—as well as captured items from conquered nations—and reshaped the metal into more desirable jewelry and statuettes.

HHRG is still engaged in similar activities, though without the need to resort to global conquest and forced seizure of gold and silver to supply its refining crucibles.

Instead the company purchases scrap gold, silver and platinum and palladium-bearing scrap from dealers across North America, as well as procuring dore bars from miners. The dore bars are less than 90% gold-bearing ingots, but HHRG refines them into a gold ingot with more than 99.999% purity.

“Smelting is centralized in Attleboro, Mass., where we have a large electro-chemical smelting facility that can produce 99.999% pure gold and silver,” says HHRG president and CEO Barry Wayne.

Wayne notes that the gold market does not differentiate between ingots produced from scrap gold items or from mined gold dore ingots. “The ultimate product that generates from the secondary materials has the same purity as that which comes from newly-mined material,” he remarks.

Scrap is procured in several forms, Wayne notes, listing “electronic scrap, jewelry, photographic films, industrial scrap, brazing alloys and catalysts used in pharmaceutical and other operations.” The company does not recover platinum or palladium from automotive catalytic converters, says Wayne.

The company’s refined ingots are shipped to the world’s precious metals terminal markets, including the COMEX terminal in New York City and the London Bullion Market Association in the U.K. “We have good delivery status at the world’s terminal markets,” says Wayne, “and our metals are used for industrial and investment purposes.”

By volume, silver is produced in the largest amounts by HHRG. “Industrial markets for silver, in terms of demand, are good,” says Wayne. “Our output is high purity, which makes its demand for industrial applications good.”

While the per ounce price of gold and silver has been wallowing at or near historic lows for much of the 1990s, HHRG’s business is not structured around the metals’ market value. “Pricing is not a determining factor in our bottom line,” says HHRG refining sales manager Bill LeRoy.

“They do have some effect, but it’s not a straight line effect,” remarks Wayne. Much of the refining is done on what could be described as a toll processing or assaying basis, with a certain percentage of the payment for any metal taken in being retained by HHRG as a processing cost.

ELECTRONICS EXECUTION

A relative newcomer to the precious metals recycling process—especially when compared to jewelry and statuettes—is the collection of electronic and computer scrap.

Most computer and telecommunications equipment that has been produced contains a few key components made of gold, silver or another type of precious metal. By percentage, the amount of gold or silver in a telephone or computer monitor is tiny. However, given a mountain of telecommunications and computer equipment to mine from, a precious metals recycler is able to recover enough gold or silver to make the effort worthwhile.

At the same time, the fast-moving pace of the information age has left in its wake a staggering amount of obsolete computer and telecommunications equipment generated by corporate America. (Not to mention the desire of the American middle class to have the latest gadgets, which is leaving another large pile of electronic, telecommunications and computer scrap.)

Thus a marriage between supply and demand has been born: a supply of obsolete equipment and a demand for the recoverable materials—especially precious metals—found within.

The marriage has led to the birth of the electronic scrap recycling industry and HHRG has been among the earliest family members. The company has accepted electronic scrap from manufacturers for some time. But more recently it has expanded its efforts to take in more of the electronic scrap being generated by end users of electronic equipment.

“The size of the market is still undefined, but it’s monstrously large,” LeRoy says of the electronics recycling segment. “It’s becoming more and more important to offer services to the generators of this scrap,” he adds.

In February, HHRG began fulfilling a contract to accept all electronic scrap generated west of the Mississippi River by the U.S. DOD. The company is collecting the scrap from DOD sites throughout the U.S. and is processing the material primarily at its locations in South Windsor. HHRG also has facilities in Phoenix, Attleboro, Mass., and Villa Park, Ill.

“The contract represents a significant expansion of our business,” says Richard Searle, vice president – sales and marketing for HHRG. “We’ve had the electronics recycling group in Phoenix for several years. This is a much larger expansion of that business, particularly with the government, which produces substantial quantities of scrap while demanding high levels of security and certain capabilities, which we have demonstrated.”

Factors beyond volume processing capability were critical in winning the contract, according to Wayne. “The contract was awarded primarily because of our environmental capabilities,” he comments, “ as well as our security capabilities and our abilities to dismantle components and refine precious metals.”

“You certainly do have an environmental challenge to meet,” says Searle regarding electronics recycling. “The nature of the stream means there is a wide diversity of materials—not only the precious metals, but base metal streams and plastics.”

While end markets can be found for the non-precious metals easily enough, it can be more of a challenge to find a home for the plastic. Much of it goes to a Connecticut energy company for a waste-to-energy  application.

“Within the DOD program, we have some considerations that don’t apply to other customers,” LeRoy notes. “The destruction of some memory—hard drives or an experimental chip—might be necessary. There are several security considerations.”

HHRG’s officers are confident that the company is satisfying all the environmental and security requirements the government has linked to the contract. Now it has to be prepared for the volume of scrap that is heading its way.

“The biggest challenge is moving the volume of material,” says Wayne. “It’s a large volume that has to be collected from across the country and moved.”

“We have an existing transportation department that we have broadened to handle this,” says LeRoy. “Logistically, there have been a lot of challenges, but we’ve been pleased with the government’s response to the problems.”

All indications are that electronic scrap will continue to be produced by the truckload in the years ahead, meaning that HHRG has tapped into a worthy vein of precious metals.

“Even if you weren’t recycling obsolete electronics for the precious metals, you still have a disposal problem,” notes LeRoy.

The fact is, though, that trace amounts of precious metals do exist in the stream, and while recovering it is labor-intensive it can still be cost-effective compared to a mining operation.

“The relative cost of remelting and refining compared to the cost of mining is really very small,” says Wayne. “It’s a great service to be able to provide: Recovering through recycling a very high-value product for a very low cost.”

The author is editor of Recycling Today.

Sidebar

Reaching the End of the Line

What happens to a computer when it has been shut down for the last time, unplugged and sent to a Handy & Harman Refining Group Inc. facility for recycling?

According to HHRG refining sales manager Bill LeRoy, the computer is shipped to one of the company’s facilities, where it is first evaluated from a security and re-shipping standpoint. “That’s the primary front-end issue,” he says, noting this is can be true for both corporate clients and with materials garnered from government contracts.

“Then a triage of resaleability occurs,” he says. “If we can, we look at opportunities within the used computer or electronics marketplace to move these materials if there is customer approval.

“If we can’t use it as a whole unit,” LeRoy continues, “it goes to a tear-down area where we evaluate it for secondary saleable units—things like the monitor, hard drive or chips that can be removed and sold on a pre-arranged split basis with the customer.

“If it’s determined that there is nothing of resale value as a component, the whole unit moves down the line and is disassembled to fragment level,” says LeRoy. The process is labor-intensive, he notes. “This is all manually done. It is not a chop and spin-dry situation.”

The fragments are sorted by their dominant material, and “then things leave the facility,” according to LeRoy. “Copper and aluminum are sold to secondary smelters. The ferrous parts are sold to a scrap processor. The plastic goes to a waste-to-energy facility. The monitor glass is used as flux for melting at our Attleboro refinery.”

Also going to Attleboro, of course, are the gold, silver, platinum and palladium components that are culled from the electronic scrap stream. The size and percentage of such components may be small, but they are separated carefully and are the primary reason why the labor-intensive process takes place.

Sidebar 2

Linked By Association

Earlier this year, Handy & Harman Refining Group Inc. announced that it was one of the founding members of the International Association of Electronics Recyclers (IAER).

The stated mission of the IAER is to develop standards for managing the life cycle of electronics products and membership will include electronics recyclers,  manufacturers and other trade groups that represent a cross section of the electronics and recycling industries.

“There are opportunities for recovering valuable materials, and there are challenges inherent in understanding and meeting environmental regulations,” notes HHRG’s Richard Searle. “This association will be a progressive force with a focus on solutions.”

Initially, the IAER will develop standards for electronics recycling procedures, and then will certify compliant companies for membership.

The new organization sees a great deal of room for growth in its industry, citing a U.S. EPA finding that 70% of obsolete computers, TVs and other electronic products are currently ending up in landfills rather than being recycled.