Re­cy­cling a sus­tain­able growth area

The Weekend Australian - Review - - Investments - Mike Hanley

TO un­der­stand the growth of the global re­cy­cling in­dus­try, take your next hol­i­day to a Pa­cific is­land, the smaller and more re­mote the bet­ter. Is­lands such as Niue, Kiri­bati and Tu­valu are lit­tered with per­ma­nent rub­bish, in par­tic­u­lar plas­tic and metal, that has nowhere to go.

Car bod­ies, old boats, even the relics of World War II tanks and guns, sit where they die, slowly rust­ing. Gov­ern­ments in the re­gion don’t have the ca­pac­ity to do any­thing about it.

Un­til re­cently it wasn’t eco­nom­i­cally vi­able to ship the met­als away. The dis­tances in­volved are enor­mous, quan­ti­ties are small, and fer­rous met­als are all mixed up with non- fer­rous met­als, mak­ing sort­ing and scrap­ping costly.

Tahiti alone cre­ates 2500 tonnes of used­car waste a year. Just three years ago, any ship­ments of rub­bish off the is­lands were or­gan­ised by not- for- prof­its. In 2005 Niue and Tahiti loaded their first ship­ments of metal to New Zealand for re­cy­cling, or­gan­ised by NGOs. But to­day the com­mer­cial world is get­ting stuck in of its own ac­cord.

With the price of cop­per, alu­minium and steel sky­rock­et­ing, the private sec­tor is scour­ing the is­lands for re­cy­cling op­por­tu­ni­ties. At Sims Metal, one of the world’s largest metal re­cy­cling com­pa­nies, Ju­lian Muller, PNG and Pa­cific man­ager, is pre­par­ing to buy a $ 500,000 por­ta­ble bailer to ship from is­land to is­land. The first com­mer­cial shipment from Tu­valu is ex­pected soon.

The metal is to be shipped out of the South Pa­cific to Aus­tralia or New Zealand to be re­cy­cled, even­tu­ally end­ing up in China or In­dia. This is just one ex­am­ple of the glob­al­i­sa­tion of the re­cy­cling busi­ness, an in­dus­try that used to be ex­tremely lo­cal and very lim­ited in scope.

Fer­rous metal prices are at record highs, which is what is driv­ing the mar­ket,’’ says Muller. We’ve been work­ing in PNG for some time, but be­cause trans­port costs are so high and quan­ti­ties so small, it wasn’t fea­si­ble to work in the rest of the Pa­cific. Tech­nol­ogy has im­proved — shred­ding and sort­ing equip­ment is more ef­fi­cient, but re­ally it is de­mand that is driv­ing the mar­ket. The Pa­cific has been iden­ti­fied as an un­tapped re­source.’’

Even within Aus­tralia, metal re­cy­cling is boom­ing for a num­ber of rea­sons: in­creas­ing process of raw ma­te­ri­als, the in­creas­ing cost of land­fill, com­mu­nity re­sis­tance to new land­fill sites, and en­vi­ron­men­tal poli­cies de­signed to min­imise the amount of waste go­ing to land­fill.

De­mand for met­als from China is driv­ing a great deal of the in­ter­na­tional in­vest­ment in re­cy­cling. In the alu­minium in­dus­try, for in­stance, China is ac­tive as an end- user and a pro­ducer of re­cy­cled alu­minium. Ac­cord­ing to Mike Greulich, the head of non- fer­rous met­als at a pri­vately owned Ger­man scrap metal trader Scholtz, re­cy­cled alu­minium out­put was 1.6 mil­lion mega­tonnes in 2004, but this is to in­crease to some 4.5 mil­lion mega­tonnes by 2010.

Pro­duc­tion growth in China is mainly based on struc­tural ben­e­fits, cheap labour, for in­stance, as well as more re­laxed en­vi­ron­men­tal leg­is­la­tion than in the west, and rel­a­tively low en­ergy costs,’’ says Greulich.

At the same time, alu­minium re­cy­cling in Europe has been driven by tech­no­log­i­cal in­no­va­tion, with the au­to­mo­bile in­dus­try tak­ing the lead with a pow­er­ful foundry in­dus­try with high hu­man know- how to im­prove cast­ings qual­ity in short cy­cles.’’

In­vest­ment in re­cy­cling is also hap­pen­ing at the prod­uct man­u­fac­tur­ing stage, with in­creas­ing num­bers of man­u­fac­tur­ers de­sign­ing prod­ucts for re­cy­cla­bil­ity at the be­gin­ning. The Coca- Cola com­pany has an­nounced it in­tends to re­cy­cle 100 per cent of the alu­minium drinks cans it sells in the US, as well as all its PET plas­tic bot­tles.

Al­though the prices of other raw ma­te­ri­als haven’t in­creased as much as met­als, plas­tics and glass re­cy­cling is also boom­ing. Ac­cord­ing to the Aus­tralian plas­tics and chem­i­cal in­dus­try as­so­ci­a­tion ( PACIA), in the decade to 2007 plas­tics re­cy­cling more than dou­bled, from 7 per cent to 15.9 per cent — this in the face of in­creas­ing plas­tics vol­ume con­sump­tion.

Glass re­cy­cling too is at­tract­ing a sig­nif­i­cant amount of in­vest­ment. In 2005, Visy opened Aus­tralia’s most tech­no­log­i­cally ad­vanced glass re­cy­cling fa­cil­ity. With a multi- mil­lion dol­lar price tag, the fully au­to­mated fa­cil­ity in Laver­ton near Melbourne can re­cover in ex­cess of 150,000 tonnes of glass ev­ery year — an in­crease of 50,000 tonnes over its pre­de­ces­sor fa­cil­ity.

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.