Scrap Industry News

Can the Watchdogs be Trusted?

Scrap copper refineries have virtually disappeared from the American landscape, and one recycler blames “incompetent and poorly constructed environmental legislation” as the primary culprit.

In a speech to attendees of the Institute of Scrap Recycling Industries Inc. (ISRI) Copper Roundtable, held in Chicago Monday, Sept. 11, Cerro Copper Products Co. president Henry Schweich blasted the U.S. Environmental Protection Agency and other regulators for the “pointless destruction of the copper scrap industry.”

After listing a roster of companies that formerly operated scrap-consuming electrolytic refineries, Schweich said while he couldn’t be certain why each of these shut down, “I know why Cerro shut down its scrap refinery—not because it wasn’t efficient, but because of excessive and unreasonable costs imposed by environmental agencies.”

Saying the company takes “great pride in our environmental efforts,” Schweich said Cerro nonetheless was sued in the late 1980s over wastewater clean-up issues and agreed to take measures to address the charges, even though the company determined many of them were redundant.

According to Schweich, total capital costs of such mandated projects exceeded $5 million (plus legal fees) for the company, but more importantly, “operating costs also rose greatly. The conversion process went from five-and-a-half cents per pound to 14 cents per pound. It was easy to see that the profitability of the refining business was disappearing.”

The Cerro electrolytic scrap refining facility was shut down in 1998. Combined with other closings—most recently Southwire’s Carrollton, Ga., facility—Schweich stated that in the U.S., the regulatory climate and its results, have set copper recycling volume figures “back 100 years.”

He called upon attendees to urge elected officials to “support the risk of legitimate risk evaluation using sound—not junk—science” when crafting and enforcing legislation and to lobby for Congressional oversight of agencies such as the EPA.

Schweich noted several recent court decisions and the conviction of a laboratory worker who skewed test results against a manufacturer may finally offer reasons to believe that “we can bring some sanity” to the regulatory process.

Less than two weeks after Schweich’s remarks, a case presented to a federal grand jury added weight to his remarks. According to a Wall Street Journal report, the grand jury received a 30-count fraud indictment against current and former employees of the U.S. laboratory operations of London-based Intertek Testing Services Ltd.

In the indictment, the federal government describes a “conspiracy within the company [at one time the nation’s second-largest independent environmental testing lab] to pump up profits at any cost,” according to the news report.

Federal prosecutors say the company often falsified reports to meet clients’ expectations, and also accused the Dallas area testing lab of maintaining sloppy laboratory conditions that led to faulty test results.

Jay Gourley, an investigative reporter quoted in the Wall Street Journal article, says the Intertek case will not be an isolated one. “There are a lot more cases out there after Intertek,” he remarks. “Intertek is just the beginning of the story.”

North Star Signs Tecnored Deal

North Star Steel Co., Minneapolis, and Tecnologos Desenvolvimento Tecnologico (Tecnologos Technological Development), Rio de Janeiro, Brazil, have formed a 50-50 joint venture company to use and license Tecnored technology for processing iron ore and iron-bearing materials into a “liquid iron” scrap substitute material.

The joint venture, known as StarTec Iron LLC, controls sole rights to Tecnored technology and is now completing final engineering and selection of a site in Brazil for the first Tecnored demonstration plant. The first stage of that facility is designed to produce 150,000 tons per year of either hot metal or pig iron, with start-up expected during the second half of 2001. The facility can be expanded, the companies say, if demand for the scrap substitute is sufficient.

The process uses a patented compact shaft furnace to reduce and smelt self-reducing pellets containing iron ore fines or waste oxide fines combined with solid fuel sources of carbon into molten iron—commonly called hot metal in the steel industry—and pig iron.

“We’re pleased with the joint venture because studies show the process has tremendous potential as a very competitive, economical method for electric-arc furnace mini-mills to directly feed high-purity, molten pig iron into furnaces that are melting scrap into new steel,” says Steve Filips, executive vice president of North Star.

“Currently, large quantities of fine wastes from blast furnaces and steelmaking are generated and either become a disposal problem or are ineffectively recycled in the existing processes. The Tecnored furnace has shown in recent studies that it can convert waste fines into hot metal equal in quality to that produced in a blast furnace,” Marcos Contrucci, director of Tecnologos and principle inventor of the process says.

North Star Steel Co., a subsidiary of Cargill, is the second-largest mini-mill steel producer and the seventh-largest steelmaker among U.S. steel companies.