Where there’s junk, there’s gold
There’s money to be made in recycling others’ rubbish, writes Adam Minter
For 30 years, China has recycled more cardboard boxes, plastic bottles and old computers than any other nation. But now it wants to stop. In July, China notified the World Trade Organisation that it will soon prohibit the importation of many types of recyclables. As a result, recycling programmes and companies around the world are scrambling to find new destinations for the junk they once sent to China.
It’s a true recycling crisis, but it doesn’t have to remain one. China’s decision — which the Government claims is driven by environmental issues — effectively deprives its companies of a cheap source of raw materials. That’s an incentive for other countries, companies and programmes to invest in new, cleaner technology to take China’s place and gain access to those materials for themselves. Arch-rival Japan may be the first to seize the opportunity.
Like many other countries, Japan has for decades relied on China as a major destination for its recycling. This solved an immediate problem, but was also a boon to Chinese manufacturers. After all, while environmental concerns have driven the expansion of recycling programmes throughout the developed world, what goes into the recycling bin is also manufacturing feedstock.
Almost half of China’s copper supply, for example, is recyclingbased.
This is especially true for difficultto-recycle items such as electronic waste. “Mining” an old mobile phone for gold or other rare metals is far cheaper than digging a mine, particularly if labour is inexpensive and environmental controls are limited.
China’s output was extraordinary: at its peak, the country’s leading e-waste processing zone produced 20 tonnes of gold annually from old electronics.
The Chinese Government has good reasons to get out of the trade. Pollution associated with electronic waste has become an embarrassing global cause; growing volumes of gadgets discarded by Chinese themselves have reduced the need to import more from abroad.
This leaves the market open. With long-term government support for research, some of Japan’s biggest companies are moving to deploy technologies that will replace some of the low-cost and polluting recycling systems long used in China.
For example, Mitsubishi Materials is investing more than US$100 million ($141m) in precious metals refining plants devoted to electronics and lithium-ion car batteries. Initially, Mitsubishi will focus on Japan, but it is also planning to open a plant in the Netherlands, where it could manage some of the European Union’s electronic waste once bound for China. Crucially, those plants won’t only make money as service providers; Mitsubishi also sees them as a hedge against expected future scarcity.
Mitsubishi doesn’t expect to have its recently announced plants fully operational until 2021. But once it does, the raw materials derived from those plants will be freely traded worldwide. Chinese manufacturers will face higher costs and lower competitiveness, while Mitsubishi and Japan enjoy economic and environmental benefits.
It’s an investment lesson that recyclers and governments around the world should heed.
At the same time, the private sector should work more closely with recyclers to develop clean technologies and methods that will keep recycling closer to home. While no one programme will make up for the loss of China’s recycling capacity, not investing at all would be a true waste.
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