Scrap Industry News

One of the major names in electric arc furnace (EAF) steelmaking appears destined to fade into the background with the latest acquisition announcement by Nucor Corp., Charlotte, N.C.

Birmingham Steel Corp., Birmingham, Ala., and Nucor have reached an agreement for Nucor to purchase most of the assets of Birmingham Steel.

“We are pleased to have taken this step  toward a transaction that would, if consummated, be accretive to Nucor sharedholders and would also benefit our customers and employees,” says Nucor president and CEO Daniel R. DiMicco.

Assets to be acquired by Nucor include mills in Birmingham, Seattle, Kanakee, Ill., and Jackson, Miss. Nucor will also take possession of an idle melt shop in Memphis, Tenn., a steel service center in Florida and two scrap processing operations.

The scrap facilities are Klean Recycling in Jackson, Miss., and Richmond  Steel Recycling, with two locations in British Columbia, Canada.

Nucor will reportedly pay $615 million for Birmingham’s assets, topping an initial offer of $500 million the company made for select portions of Birmingham Steel back in February. At that time, DiMicco indicated that Nucor’s major interest was in the four EAF mills.

The Nucor CEO also indicated that current Birmingham president and former Nucor executive John Correnti would not be invited to remain part of the resulting combined management team. “As far as John being part of our organization structure going forward, the answer would be no to that.”

A Lot Of Baling, But Little Recycling

What was once envisioned as a major recycling project at the Oak Ridge Department of Energy facilities in Tennessee is now being termed one of the world’s largest “cleanup” projects, with little recycling taking place.

One of the world’s heaviest-duty balers has been on the job for several months at the Oak Ridge site, but the machine is now being referred to as a compactor, as most of the 72,000 tons of demolition material emanating from Oak Ridge has been landfilled after concerns from environmentalists and metals companies resulted in a ban on recycling the materials.

“Our overall project is about 61 percent complete,” says John A. Christian Jr., vice president of the demolition project for BNFL Inc. He says the project will end in 2004.

The metal being generated at Oak Ridge is being processed by a heavy-duty baler made by Harris Waste Management Inc., Peachtree City, Ga. The machine is powered by 2,200 tons of hydraulic force and can process 58 tons of metal per hour. The volume reduction has helped BNFL keep disposal costs down.

“Underground” Scrap Targeted

A statement from the General Accounting Office (GAO), Washington, is urging the U.S. EPA and state agencies to step up enforcement of the removal of corroded steel underground storage tanks (USTs).

In testimony before a Senate subcommittee, the GAO’s John Stephenson remarked that the EPA needs to address “the estimated 76,000 tanks that have not yet been upgraded, closed or removed as required.”

Since a law passed in 1984, the EPA has led enforcement efforts aimed at identifying and removing leaking USTs, the majority of which are made of steel. Since the 1984 law, many gas stations and other owners of USTs have removed older steel units, replacing them either with double or triple-wall steel tanks or fiberglass models. New tanks, whether made of steel or fiberglass, must contain federally approved leak detection equipment.

The GAO study identified several states that host a significant number of USTs but do not have a tank inspection schedule that covers all tanks on a regular basis. If these states—which include Texas with more than 50,000 USTs, New York with more than 30,000, Ohio with slightly less than 30,000 and Georgia with more than 25,000—increase their attention to inspections, it could generate additional scrap USTs there.

Ford Exec Calls Greenleaf A "Failure"

Sustainability is a key corporate goal for Ford Motor Co., Dearborn, Mich., but an initial attempt to enter the recycling industry has not gone well for the automaker, according to one company executive.

Speaking to attendees of the International Symposium on Electronics and the Environment in San Francisco in May, Heritage 2000 Manager James L. Richardson described the “recycling” of the Ford River Rouge complex in Dearborn and the company’s commitment to revitalizing the sprawling industrial complex.

Considerable construction and demolition materials recycling has taken place during the renovation project, he remarked. In addition to scrap metals harvested from demolition jobs, Richardson noted that 110,000 tons of concrete and asphalt have been recycled in place during the River Rouge revitalization project.

As plant space has been reconfigured, Richardson noted that space has been set aside for future vehicle disassembly operations. Even though no such tasks are taking place there now, “Bill Ford insisted on it,” said Richardson, referring to current Ford CEO William Clay Ford Jr.

But Richardson also acknowledged that Ford Motor Co.’s initial attempt to enter the auto recycling industry has not gone as smoothly as planned. In the late 1990s and into 2000, the company purchased several existing automotive salvage and parts recycling companies and unified them under the name Greenleaf.

Richardson, who referred to the Greenleaf subsidiary as the acquisition of “several junk yards,” said of the purchases, “They’ve been abysmal failures up to this point.” Reports circulated last year that Ford Motor Co. was looking to sell off its Greenleaf assets.

“It was primarily a poor business decision,” said Richardson of Ford Motor’s foray into auto recycling. The Greenleaf initiative occurred during the tenure of former CEO Jacques Nasser, and not that of current CEO William Clay Ford Jr. “The way we went into it—to buy [the salvage companies] first and then make a business out of it—doesn’t usually work,” said Richardson of the Greenleaf strategy.

During Ford Motor’s acquisition spree, many observers from within the automotive recycling industry predicted that the company’s inexperience in the specialized world of automotive salvage would be a hindrance. Overpaying for end-of-life vehicles may have been a key problem for Greenleaf. “The value of materials we were buying just wasn’t there,” said Richardson.