September/October 2011
Two e-scrap processing facilities in Southeast Asia are confounding the public’s expectations of the developing world and are poised to address the region’s burgeoning scrap electronics supply.
By Adam Minter and Rachel H. Pollack
The lobby of an electronics recycling facility fills with laughter as a dozen employees of a major consumer electronics company emerge from a conference room. They’ve just spent part of their afternoon learning how this recycler handles their scrap. The facility has a fully automated shredder with downstream separation, a dedicated cathode-ray-tube processing line, mobile shredders for on-site destruction to protect intellectual property, and chemical and electrolytic recovery of copper and precious metals—all with modern environmental controls. The employees step out of the facility into the hot, rainy, tropical afternoon. They’re not in Silicon Valley, Seattle, Austin, Texas, or any other U.S. high-tech hub. This is the headquarters of Cimelia Resource Recovery on the Southeast Asian island nation of Singapore.
Most media accounts of scrap electronics in Asia still focus on the informal sector: impoverished people burning wires and circuitboards on the side of the road to collect the molten metals, tossing what’s left into rivers or trenches. Such practices are harmful to the workers, the community, and the environment, and they deserve the condemnation they have received. But another picture of Asian e-scrap processing is beginning to emerge, one that features commercial enterprises with facilities equal to or better than those in the developed world. Singapore’s Cimelia, for instance, holds ISO 14001, ISO 9001, and OHSAS 18001 certification of its environmental, quality, and safety management systems. It’s the go-to destination for multinational companies seeking high-quality electronics recycling in Singapore—as well as for government regulators and VIPs seeking an example of how the industry can and should operate. In Bukit Tengah, an industrial town in the Malaysian state of Penang, Shan Poornam Metals has an equally stellar reputation for its approach to electronic scrap. Also ISO 14001, ISO 9001, and OHSAS 18001 certified, the company dismantles end-of-life products to recover precision-engineered, reusable parts, and, like Cimelia, it uses electrolytic and chemical processes to recover copper, nickel, aluminum, and precious metals from electronics and industrial byproducts.
The debate over the export of scrap electronics from the developed world to the developing world—specifically, from Organization of Economic Cooperation and Development member countries such as those in North America and Europe to non-OECD members, which include Singapore, Malaysia, and Vietnam—misses one fact that’s fueling these companies’ growth: With or without exports, electronic scrap is here. Whether it’s production scrap and defective products from the region’s many electronics manufacturers or goods purchased by residents rapidly crossing the digital divide, the e-scrap supply in Asia is sizable and growing. The supply of obsolete personal computers generated in the developing world will actually exceed that generated in the developed world within five to seven years, according to forecasts that researchers at Nankai University (Tianjin, China) and Arizona State University (Tempe, Ariz.) published last year. “Asia has 50 percent of the world’s population,” points out Venkatesha “Venky” Murthy, Cimelia’s managing director, “but most of the consumer market hasn’t been touched yet by consumer electronics.” This market’s growth will create “a big environmental challenge,” he says, “but also a giant business opportunity for professional recyclers” such as these two companies.
Sophisticated Processing
Murthy likes to position Cimelia as Singapore’s first “total solution” to electronic scrap. The seven-year-old company is a subsidiary of Enviro-Hub Holdings, a public company also based in Singapore that’s involved in business sectors to provide “total waste management services” from construction to energy to metals. Cimelia’s processing starts with end-of-life electronics and ends with reusable parts and clean fractions of metals, plastics, and glass. It refines and smelts copper and precious metals and turns plastics into pelletized feedstock or, in its newest venture, converts them back to oil. Shan Poornam’s philosophy, along the same lines, is “tomb to womb,” says S. Selvakumar, the company’s CEO, whose enthusiasm for his business, and the recycling of difficult materials, is nearly boundless. “If you give us something to recycle, we will get 98.5-percent recovery from it.” Shan Poornam is an offshoot of Selvakumar’s family-run scrap company, which has roots in the Malaysian and Indian scrap industries.
The two companies have several similarities beyond their soup-to-nuts approach to electronics. Both facilities look more like high-tech laboratories than scrap facilities, from the white walls to the spotless cement floors to the security guards and metal detectors controlling access to proprietary technology and valuable materials. Shan Poornam handles up to 2,000 mt of scrap and industrial sludges a month at its main facility. Out of roughly 100 mt of printed circuitboards and 50 mt of components, it might recover 3 kg to 8 kg of gold and 1 kg to 2 kg of platinum, Selvakumar estimates, not to mention the copper, aluminum, and other valuable materials. Cimelia’s plant can handle 25,000 mt of electronic scrap a year and is running at 80 percent to 85 percent of capacity, Murthy says. From its feedstock it recovers significant quantities of copper, gold, silver, palladium, platinum, and other metals and nonmetallic fractions. Both companies do off-site processing, primarily for electronics manufacturers. “Many of our customers are multinationals doing [research and development], and they’re very concerned about intellectual property,” Murthy says. “They are also concerned with the environment,” he adds, pointing out the dust collection system on a mobile shredder sitting outside Cimelia’s headquarters.
Like their U.S. and European counterparts, these companies know the value of recovering reusable components. “There’s much that the manufacturers want back,” Shan Poornam’s Selvakumar says. The company specializes in hard-disk-drive recycling. On his desk are two thumb-sized rare earth magnets—every hard drive has them. As the price of rare earth elements has risen, manufacturers have asked Shan Poornam and other recyclers to recover and return them—something you can’t do if you send the hard disk through a shredder. “The only way you can have complete recovery is if you dismantle,” he says, “so we dismantle the drives.” In one of its buildings in Bukit Tengah, four workers place hard drive cases onto a conveyor belt the width of a hand. The conveyor runs through a small oven that heats the cases just enough to release the adhesive holding an aluminum part to the stainless steel so the workers can pull the pieces apart for recycling. On a platform above these workers, others sort through bags of defective connectors and punchings that contain copper, gold, and other metals. What it doesn’t dismantle and return to the manufacturers or sell into the secondhand parts market the company further processes here or at a second location in Penang. In another building, bags of copper-bearing scrap procured from one of Malaysia’s leading electronics manufacturers await processing in a compact, enclosed system that produces a very clean copper granulate.
In contrast with Shan Poornam, the heart of Cimelia’s operation is its state-of-the-art shredding and separation system, which it calls a “mechanical dry processing plant.” The system, which Murthy designed, consists of an array of European shredders and eddy-current separators. It can process 8 mt an hour and is automated to such a degree that it requires only two operators. Murthy is particularly proud of its in-line sampling ability, with which the company can adjust the shredder and downstream processing equipment for specific scrap equipment types.
Cimelia also has Singapore’s first automated CRT dismantling line. The European system uses a laser to separate the funnel and panel glass in a clean, ventilated environment and recovers the phosphor dust via vacuum. A separate piece of equipment pulverizes the leaded glass, which the company sends to India for recycling into new CRT televisions and monitors. India still has a “huge demand” for such devices, Murthy says, which remain 70 percent of that country’s television market.
Metals Recovery and Pollution Control
Also like facilities in North America and Europe, these companies use proprietary, tightly controlled techniques to recover metals from circuitboards and other precious-metals-bearing e-scrap. There’s no incineration here, Cimelia’s Murthy says proudly. His system is “green,” he says, “and it’s a better and more complete recovery of material.” To reach the precious metals recovery area, we deposit our mobile phones at a security checkpoint and walk through a metal detector, then through a secured door into another immaculately clean hallway. Through a set of windows, Murthy points out the company’s refining room. Workers in protective gear—including respiratory equipment, gloves, and boots—move through the room, checking material being dipped into tubs filled with toxic chemicals. “You must use cyanide in this kind of work,” Murthy explains, “but instead of disposing of it in the usual way, by dilution, we go to a higher level and dispose of it entirely in a thermal oxidation system.”
To illustrate, we climb a set of stairs to an open space on part of Cimelia’s roof. There, a complex set of tanks, valves, and gauges constitutes the company’s integrated pollution control system. “This is my favorite part” of the facility, Murthy announces. The cyanide goes through a specially designed thermal oxidation unit, which breaks the chemical bonds to convert the cyanide into “more friendly gases like carbon dioxide and hydrogen oxides,” he explains. When possible, the system recycles the chemicals back into use within the facility. The system also has a custom-designed evaporator system and an automatic wastewater treatment facility capable of handling 50,000 liters a day. The gaseous pollutants go through a three-stage acid scrubber for neutralization before the treated gases get released into the atmosphere.
At Shan Poornam, a cramped room contains a raised platform surrounded by tanks of acids and other chemicals the company uses in its metals recovery process, which Selvakumar designed. In a corner is the raw material: bags of printed circuitboards that have been stripped of their chips and other recoverable materials. The circuitboards are a “scheduled waste” under Malaysia’s Department of Environment regulations, and Shan Poornam is licensed to handle them. A worker in protective gear, including gloves and a mask, is performing maintenance work on some of the equipment. Recently stripped boards sit in a bag in another corner, waiting to be taken elsewhere. “There’s no magic here,” Selvakumar says. “Other companies do this kind of process. The question is, whether you take care to do it correctly and safely.” He also shows off his facility’s water treatment system—a set of tanks and pipes that looks just as complex as that at Cimelia.
More novel, perhaps, is what Shan Poornam is doing in its secure laboratory. At first glance it looks like other labs, with spectrographic equipment, scales, microscopes, and long tables. But on those tables, and on shelves around the room, are racks of CD-sized aluminum and glass disks—hard-drive disks that have been chemically stripped of their nickel coating. This proprietary “de-plating” operation is at the heart of Shan Poornam, Selvakumar says. The process recovers not just the thin layer of nickel, but also the precision-manufactured aluminum and glass disks, which the company can sell to manufacturers for reuse. This work won the company a 2010 Special Award for Innovative Product in the Industry Excellence Awards given out by the Malaysian Ministry of International Trade and Industry.
Both companies operate smelting facilities to further refine the recovered metals and produce ingot: Cimelia recovers gold, silver, palladium, and platinum; Shan Poornam recovers those plus aluminum.
Expansion and Challenges
Further growth for these companies will come, in part, from processing new materials. In addition to processing electronic scrap, Shan Poornam recovers waste acid, alkaline, and solvent chemicals. Selva kumar is particularly excited about the company’s work to recover copper from industrial sludges generated in the Penang area. “This is a new area for us, with little competition,” he enthuses. “It has its problems, of course. Many waste generators aren’t yet [following] the [Department of Environment] scheduled waste regulations. So we have to help them do that. But that gives us an advantage, too.” The company’s experience working with multinational manufacturers—and meeting their high standards for environmental compliance—gives it the knowledge and resources to work with companies that want or suddenly need to follow the law. Cimelia’s next venture, meanwhile, is Singapore’s first white goods processing plant.
Each company also is building new facilities that will bring sophisticated e-scrap recycling to other developing countries—most notably, India. Shan Poornam has just opened a small plant in Chennai; Cimelia is partnering with Cerebra Integrated Technologies (Bangalore, India) to establish what it says will be that country’s largest e-scrap processing facility this fall. Cimelia already has a pre-processing plant in Brazil and another in Thailand—the latter a partnership with Bangkok’s Professional Waste Technology (1999) Public Co.
These companies are slowly starting to transform the region’s much-maligned e-scrap trade, raising the bar on what an electronic scrap processor can accomplish in the developing world. “We need more and more companies to come forward and communicate [and] cooperate enough to make a mature, knowledge-based recycling [industry] in Asia,” Murthy says. “This is what we’re building. We need to build specialized knowledge for recycling.”
Challenges remain, however. Shan Poornam and Cimelia must compete with the polluting—but highly profitable—informal side of the industry. “It’s a generator-driven market,” Murthy says, and those who sell electronic scrap to processors often look only at the bottom line. Companies such as his can’t always offer the price the informal sector can. The generators of electronic scrap “have the power to choose,” Murthy says. The sellers ask themselves, “Should I give [my scrap] to Cimelia? I get back one dollar less. [Or] should I send it to China,” where the informal sector is still rampant? If so, “I get three dollars more.”
Regionally, the biggest problem is that most Asian countries “lack a central authority to oversee and regulate the [e-scrap] industry,” Murthy says. He would like to see an Asia-Pacific equivalent of the European Union’s Waste Electrical and Electronic Equipment Directive that would provide regional guidance and permitting for e-scrap recycling. “We believe, based on our experience with the multinationals, with the generators, [that] it’s not just having a license, having a facility or the technology. We need to establish a good legal framework so that clients are more comfortable [working] with us.
“Obviously, such a directive would help Cimelia,” he says. “It would make life easier, and it also [would help us invest] in the best technology, and also to invest in developing countries like India and China.” Further, it would bring “clarity and improvements to the industry throughout our region.”
Then there’s the question of imports. Murthy supports the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal, an international agreement that allows countries to block imports or exports of material they consider hazardous (often including electronic scrap), but the convention can be a barrier, he says. Under Basel, companies wanting to export materials listed as hazards must ask their government to get written consent from the government of the importing country. The Basel Ban Amendment would go even further—it would prevent OECD member companies from exporting Basel-listed hazards to non-OECD member companies—including Singapore and Malaysia—regardless of how those materials might be handled. Though the amendment has not yet taken effect, the European Union and several countries have passed their own laws to create such restrictions.
In the few Basel signatory countries that still allow exports of end-of-life electronics under the original terms of the convention, Cimelia works with exporters to ensure they’re in compliance, such as it did for the several pallets of monitors it recently imported from a customer in Australia. We “make sure the exporting country has the proper notification and the importing country has no objection, so there’s no conflict between them,” Murthy says. He estimates that about 60 percent of the company’s material is imported, and 60 percent to 80 percent of that comes from the developed world. At times, however, exporting countries refuse to issue such permits, even when Cimelia can offer processing that’s better than anything the country has domestically.
The United States has not ratified the Basel Convention, though it has put Basel-like notification and other regulatory requirements on the export of CRTs. Even so, confusion about U.S. export restrictions—as well as media exposés of unregulated e-scrap handling by some companies in China and Africa—have many U.S. companies wary of sending their electronic scrap overseas. The result, Murthy says, is “we have trouble getting raw materials,” while illegal imports to informal-sector processors continue unabated. There’s no restriction on the movement of new electronic products, Murthy points out. “A laptop made by IBM moves around the world—poor country or rich country, the impact is the same. We should not have any boundaries” impeding the proper recycling of electronic scrap, regardless of where it is, he asserts. “We need common understanding to protect our planet.”
Adam Minter is a journalist based in Shanghai, where he writes about business and culture for U.S. and international publications. He also maintains a blog at www.shanghaiscrap.com. Rachel H. Pollack is editor of Scrap. Parts of this article originally appeared in Recycling International.
Two e-scrap processing facilities in Southeast Asia are confounding the public’s expectations of the developing world and are poised to address the region’s burgeoning scrap electronics supply.