While some companies choose to specialize in a narrow niche of products and services, others, such as Handy & Harman, New York, find diversification the key to success. From its beginnings in precious metal bullion and coin trading in 1867 to its various manufacturing and refining divisions today, the company has frequently taken advantage of opportunities to broaden its range of services.

One of the most significant international players in precious metals recycling, Handy & Harman operates four refineries in the United States, along with operations in Tokyo and Singapore, that process a wide variety of precious metal-bearing scrap from industries as varied as electronics, mining and secondary refining, jewelry and the arts, dental, photographic and plating.

Most recently, Handy & Harman’s precious metal refining division has begun offering disassembly services for computers and other electronic hardware, recovering any usable integrated circuits and recycling or appropriately disposing of the rest. The company also assists customers in building a strategy to help manage end-of-life electronic assets and control any associated liability.

"What we are becoming is a full-service, one-stop shop for the electronics recycling industry," explains Joseph Mahoney, Handy & Harman’s business manager for electronics recycling. "Handy & Harman has been in the integrated circuit recovery area for two years. Prior to that, we had been in the electronics recycling business for probably 37 or 38 years. So we’re one of the most experienced players in electronics recycling."

The rapid rate of obsolescence in current computer technology is one factor making integrated circuit recovery practical, as a computer becomes outdated long before many of its ICs have reached the end of their useful lives. Handy & Harman recovers these ICs and sells them for remanufacture into lower technology products, such as video games, says Mahoney.

"The older technology was fine," he says. "It just needed to be reintroduced through a secondary distribution channel. Integrated circuits have a very long life, are a very robust part, and many can be reused. And some of them, ounce for ounce, have a value greater than gold."

Although Handy & Harman’s asset recovery business is growing rapidly, it is a relatively small portion of the company’s overall business. About a third of Handy & Harman’s precious metals recovery business is directly related to specialty products the company produces, and the rest is either indirectly product related, or is not product related, according to Richard Searle, vice president of sales and marketing.

"We recover precious metals from product customers; for example, jewelry customers, silverware customers, electronic manufacturing customers who use our precious metal products, automotive customers who use our precious metal products, and in other industries which use our precious metal products," Searle explains. "One of our main operations is the recovery of precious metals from the mining industry. That’s a primary output of material, so of course they’re not using any of our products."

Indirectly, the company’s precious metal products go to many different industries. "Wher-ever precious metals are functionally used, our product division probably applies some prod-uct to that industry," he says.

Handy & Harman has long been a leader in precious metals refining, he says, and is one of the lowest-cost refiners in the world. Some years ago, the company was one of the first to institute a molecular recognition technology for recovering trace elements of platinum group metals from the waste streams of precious metals refining.

"We’re innovators in precious metals recovery – we have to be," says Searle. "Refining service is probably one of the best values for the money you can get. The cost of recovering precious metals relative to the value is very insignificant. It is getting more and more like a commodities business – the price is going down, not up, and you have to get more and more efficient to stay in business. We’ve succeeded in doing this."

Handy & Harman’s refineries have a well-honed system of bar coding lots and tracking them all the way through the refining process. Shipments are rendered homogenous through processes such as thermal reduction, milling, melting, and hydro-metallurgical techniques, and then assays are made in the company’s labs from which the customer is paid. Metals are melted, ingoted and then about 75 percent is consumed by Handy & Harman in its manufacturing facilities. The balance is either sold back to the producer or placed on the commodities market. Base metals are sold to outside mills.

The company also recovers any process scrap its own product manufacturing group produces.

Handy & Harman’s electronics business is a part of the company’s precious metal refining division. Obsolete electronics equipment first comes to the electronics group, where it is analyzed and any recoverable ICs are removed. The balance is sent to a company refinery for precious metal recovery. The customer is paid separately for recovered ICs and precious metals.

"Our core business is precious metal refining, but IC recovery is both a feeder for refining and a needed addition to add more value to peoples’ inventory and assets," says Mahoney. "In 1995 we returned more than $10 million to customers just in IC recovery in our second year of operation. We’ve processed several million ICs in the past two years."

Although the company buys electronics scrap from a variety of sources, the largest customer is the original equipment manufacturer, says Mahoney. "We feel our services are better matched with major OEMs than smaller companies," he explains. "Major OEMs are interested in end-of-life management of their products. Purchasing raw materials once and reusing, refurbishing and reclaiming them fits into their long-term asset recovery plans."

Development of this asset management service two years ago was largely market driven, says Mahoney, as companies realized they could save significant amounts of money by coaxing more life out of existing electronics rather than destroying or completely recycling them after one use.

"Asset recovery and end-of-product life management is becoming an important revenue source for major companies," he says. "With both the development of reuse of integrated circuits and the tremendous amount of capital invested by these companies, to see this material lose its value in 18 months or less was drastic."

Two potential problems face OEMs interested in recycling electronics, according to Mahoney. One is the possibility of intellectual property rights not being secure, and the other is for the hazardous materials contained in electronics to become an environmental compliance nightmare.

"There are horror stories of technology being stolen and intellectual property getting into the hands of competitors," he explains. "We were able to demonstrate that 35 years of handling the assets of our customers just in the electronics industry without a single breach of security was a pretty good track record.

"The other part is environmental," he continues. "OEMs know the ramifications of being tagged as a Superfund violator. We have protected all of our customers’ environmental concerns very well over the years. We are unique in that we’re publicly-held, we’re traded on the New York Stock Exchange, and we have to adhere to the same environmental regulations as most of the major computer companies do."

In the long term, recovery of assets from the electronics industry is only successful "if no environmental obligations are incurred downstream," adds Steve Foulk, refining sales and marketing executive for Handy & Harman. But the company has taken every measure to ensure environmental compliance in both precious metals recovery and electronics operations.

"We have the newest facilities for treatment of electronic materials in the industry – they were all built in 1985 or after," says Foulk. "They were built to the toughest specifications for protecting the environment, since electronic scrap does contain well known hazardous substances which have to be controlled."

Handy & Harman is also closely watching regulations regarding the hazardous nature of electronic components, he says. In order to assure maximum environmental compliance, says Foulk, Handy & Harman retains a full-time environmental lawyer, John Bullock, who works on both a national and an international scale and served as a delegate to the Basel Convention.

Another motivating force behind the asset management business is the threat of possible government regulation. "Recovering an ounce of gold out of electronic scrap is easier than recovering it out of the ground," says Foulk, "but the problem is that it contains a high concentration of hazardous substances and it may have to be regulated."

According to Handy & Harman, it is likely that the U.S. will at some point follow the example of Germany and pass producer responsibility laws requiring manufacturers to provide recycling and disposal outlets for their products at the end of those products’ useful lives. Even in the absence of such legislation, U.S. corporations often recycle old electronics, but consumers still landfill them.

"A vehicle needs to be developed for that," says Mahoney. "We’re very active in developing end-of-life programs with manufacturers. In addition, we’re working to set up ways to handle the taking back of older computers in homes, and redesigning computers for the future so they can be upgraded quickly or, if they are disposed, they won’t hurt the environment."

Although the U.S. may not be likely to pass a producer’s responsibility law anytime soon, many OEMs are taking steps to provide some type of product-return program before it is mandated, in hopes of averting a mandate altogether.

"There’s lots of activity, and Handy & Harman is right in the middle of it," says Mahoney.

The U.S. Environmental Protection Agency is examining the question of how best to handle hazardous substances such as lead in electronics components, which could leach into groundwater if the materials are landfilled, says Foulk. The agency is watching the German system of producer responsibility, but "the feeling is that Germany is establishing a law without the infrastructure to carry it out. The EPA is looking for a more practical approach here," he says.

Although the company buys scrap electronic materials from some leasing companies and local collectors, most of it comes from OEMs looking to be proactive about reuse and recycling, says Foulk.

"They are concerned about the potential of take-back regulations and feel the need for an internal system to handle this," he says. "The OEMs are being very responsible. They put their name on equipment when it goes out the door, and they want to make sure it doesn’t end up in a landfill. They can be proactive about offering environmentally-sound alternatives, and they are being aggressive about doing so."

The traditional precious metal mining and jewelry sectors are fairly stable, whereas the electronics sector continues to grow around 20 percent annually, says Foulk. Accordingly, the latter is an area Handy & Harman will continue to pursue.

"There are new mines opening, but not in North America," he says. "And the jewelry sector is an important part of the business because it is a high grade business – meaning the content of gold is very high in all the products coming back – but jewelry is not as important as it once was. Brides often don’t go out and register for silver flatware anymore. And, also, a lot of jewelry is being manufactured offshore, and that figure is continuing to grow."

Searle agrees that electronics and asset management are growth areas for the company. "As the U.S. as a whole gets to end-of-life management, there are going to be more and more materials becoming available for recycling, and those that contain precious metals will find their way eventually into the recovery cycle," he says. "So there’s going to be more and more product coming forward which is now discarded, and technology is going to be developed to effectively and efficiently recover it."

In addition, only a fraction of the world’s population currently uses computers, and this segment is likely to grow, says Foulk. This will lead to more recovery of precious metals and ICs.

"The number of computers is going to grow, and rapid obsolescence is still an issue and is making a lot of the older machines available for recycling," he says. "They do have some secondary life in charities and schools that can begin training on earlier machines, but eventually they do reach their end of life, and there has to be some method of recycling them."

Also, in the next few years, says Foulk, Handy & Harman hopes to develop new, more energy efficient, faster technologies for separating metals. "Right now, the technology centers around smelting and electrolytic refining," he says. "We’re looking at innovative technologies to combine many of those processes in a faster, more environmentally-friendly way. We’ve got a ways to go, but we have some process concepts that are promising."

The company will also work closely with the electronics industry, which could begin using new types of valuable materials as more advanced computing equipment is developed. These materials, as rare as precious metals, will have to be conserved, reused and recycled as modern technology proliferates around the world, says Foulk.

"It comes down to this – you have to have a way to recycle it, or you may not be able to commercialize it," he explains. "A good example is catalytic converters on cars. If you had single use and disposal, you’d run out of the resource. There has to be a recycle path for it. The same is true in electronics. We have programs dedicated to specific manufacturers who are concerned about materials management – which materials are more recyclable than others, what material substitutions could they use, and then to be certain that there is a recycle path for these materials once they are out in marketplace. So Handy & Harman is getting involved in ‘design for recycling.’"

Design for recycling is especially needed in the area of plastics, says Mahoney, as there are not yet markets for all types of plastics used on computers, and some are contaminated with materials such as fire retardants.

Handy & Harman’s business philosophy is to provide full service for the industry, beyond just recycling precious metals, adds Searle. "Our business, recovery and recycling, is a service business, not a manufacturing business. And our philosophy is extending that knowledge domestically and internationally. We are expanding our horizons not only in the U. S., but also actively in South America, the CIS, Europe, Canada – we’re extending this in a broad range."

Internationally, the company now has refining facilities in Canada, and associated facilities in Singapore and Japan. In addition, there is a possibility of opening future refining facilities in Latin America. This would enable materials to be processed directly in the country where they are generated, avoiding costly transport to the U.S. and back.

Overall, the future for Handy & Harman’s refining division looks promising, as the volume of precious metals refined is consistently increasing, along with the value added to its products and the company’s revenue. In addition, markets were strong for most precious metals at press time, and prices – particularly for silver – looked likely to increase, according to Searle.

"I expect business to increase at comfortable levels within corporate guidelines," says Searle. "I’m very optimistic about it. We’re providing a very comfortable service that companies can rely on in the long run."