American Retroworks Inc. Middlebury, VT Supply and Demand in the International Marketplace Navigating the Export

American Retroworks Inc.

www.retroworks.com Middlebury, VT

Supply and Demand in the International MarketplaceNavigating the Export Issue: Economic, Environmental and Ethical Considerations

Robin IngenthronAmerican Retroworks Inc.Middlebury, Vermont

www.retroworks.com

National Recycling Coalition



1) Basic Starting Points

2) Case Studies: USA, Cameroon, Honduras, S.China, N.China, Pakistan, Egypt, Lithuania

3) Common denominators for success & failure

4) Recommended Standards

Session Goals:



Basics behind domestic and foreign demand for used electronics and scrap

REALITY: If USA exports everything, we send 1/3 reusables, 1/3 recyclables, and 1/3 Toxics Along for the Ride.

REALITY: if USA exports nothing, we destroy reuseables (and they cannot afford new); they mine to replace the recycled metals, and mining produces even more toxic harm than recycling.

SOLUTION: Setting a Higher Standard. USA processing, limited exports (tested equipment, copper scrap), simple tests (like CRT Glass Test); market development to promote best practices; (funded) state processing contracts with restrictions and incentives; etc.



The Good: Repair, Reuse

The Bad: T.A.R.

The Ugly: Scrap Recycling



Scrap

TAR

Reuse

Market Forces

CD, Floppy Drives Cords, cablesVideo cards,

Monitors, ATX cases

GoldCopperAluminumSteelPlastic

Leaded glass (TVs and bad monitors)Gold process wasteMercury batteries

Lax environmentalstandards

ManufacturingDemand, Free market mining

Low wages, better repair

Contrabandcamouflage



Giant Sucking Sound Growth in Chinese demand for copper (ore and scrap): 20% per year 1999-2003

0

5

10

15

20

1999 2000 2001 2002

Reuse Forces

1. High tolerance/demand for used2. “Free” software3. Cheap parts4. Good, cheap tech. labor

Understanding Export Forces

Recycling Forces

1. Metal demand2. Balance of Trade3. Cheap labor 4. Cheap env. Laws



USA Mercury Emissions by Industry(Rank #2-#7 - w/o GOLD Mining)

0

10000

20000

30000

40000

50000

60000

Total On/Off-site Hg Releases

ElectricityPlantsPetroleum

Cement

Waste & HazWasteCopper Mining

Federal/DefenseFacilitiesSilver Mining

Source: http://www.epa.gov/region09/toxic/tri/report/01/mercury.pdf



USA Mercury Emissions by Industry(Rank #1-#7)

0

500000

1000000

1500000

2000000

2500000

3000000

3500000

4000000

4500000

Total On/Off-siteHg Releases

Electricity Plants

Petroleum

Cement

Waste & Haz Waste

Copper Mining

Federal Facilities

Silver Mining

#2-10 combined

GOLD MINING

Source: http://www.epa.gov/region09/toxic/tri/report/01/mercury.pdf



Chinese demand in particular drives both recycling and mining

1. Electric and electronic appliances “made in China”2. Chinese “New Deal” scale infrastructure development3. Asia #1 in per capita consumption of gold & platinum (the only materials which the West does not consume most of)

Mining nightmares in Borneo, Chile, Congo, Philippines, Turkey, etc.



Better to meet demand than not to?

E-Scrap is 300% richer in copper and other metals than mined ore

Recycling produces a fraction of the pollution from mining.

Gorilla and orangutan extinction is arguably driven by electrics metal mining.

One Copper mine in Papua New Guinea (feeding China) dumped 80,000 Tons Per Day of Cyanide tailings into the OK Tedi River from 1990-2000

USGS – At 1990 rate of consumption, all known copper reserves will be exhausted this century: Ocean mining will be the primary source of copper in our lifetimes.

USA Model? 95% from federal lands, $5/acre, 14/15 largest Superfund sites

Hard rock mining produces 45% of all toxics produced by all USA industries.

Gold mining releases more mercury into the environment thanmercury production and disposal combined!!!



Reuse : USA is at a disadvantage. Assess knowledge, experience, ability to support. Dollars per item, categorization. USA Export Restrictions on MBPS

Recycling: Distinction between lead (CRT) markets (42% of scrap), which are rare. Gold scrap a problem (process waste), though demand is certainly high (as compared to lead).

2nd Container Inspection: Importer promises immediate feedback on first container, digital photos, permission to do site visit after second container.

Hiding high tech goods Game playing on tariffs a big frustration. Corruption and protectionism hurts legitimate environmental practices.

Export Goals, Export Policy, Export Standards



Cameroon

-I lived there 1984-86-Friend/employee/partner is native- Connection to Rebecca Enonchong, CEO Application

Technologies Inc., World Bank Digital Divide Forum Chair- Flew Yadji there for 4 months under contract- Sewing machines- mixed clothing, shoes- dual voltage, P2 3 visits

10 container Purchase OrderNo money



Honduras

-Former partner lives there 3 months/ year-Partnership with Vermont Rotary Club- 6 Public Schools- USA 120 voltage, P1-P2

3 years3 containersGreat follow upNo money



Southern China: Scrap

-High Demand, fast payment-Invitation to speak, tour with Sino EPA- Combined scrap (copper, gold, aluminum) but not with repair

-Visit to 2 aluminum, 2 copper, 200+ reuse operations

6 months3 containersNo problemsCasualty in war on “counterfeit”



Southern China: Reuse

-High Demand, fast payment-SKD TV repair demand is booming

-Tour 200+ small resellers-SKD TV Manufacturing – -1 operation = 50,000 per month

6 months3 containersNo problemsCasualty in war on “counterfeit”



Northern China: Scrap

- Officially sanctoined- $16M in matching Beijing bank loans

- Tour – not on schedule- No visible equity

Did not proceed, no trial shipments



Lithuania

- Officially sanctoined- EU, NATO member- Establishex

- Tour – not on schedule- No visible equity

2 trial shipments, TW, AL, scrap printersThey want negative value material, but Don’t show how they will handle it



Other Visits (Fly and Buy)

-Pakistan: All the right answers. Failed surprise site visit. -Egypt: Working units only, Pentium II and above- Columbia/Bolivia/Peru: Black 27” TVs (repairable)- Belgium, England, Spain: gold bearing scrap- Ghana: Promising but importer was neophyte- South Africa: Screenvision – no reply, non-profits- Malaysia: Impressive 30 page environmental dossier, lies about CRT- Nigeria: corrupt mess

2 trial shipments to Egypt2 trial shipments (TVs) to Peru, BoliviaGhana no-show



Overall USA Monitor Management$ spent and earned per 1000 monitors

-2000

-1500

-1000

-500

0

500

1000

1500

Copper revenue

Other materialrevenue

25% monitor resale

Demanufacturing

Repair Labor

Scrap handling

Most demand for used is overseas



Possible USA Monitor Management$ spent and earned per 1000 monitors

-3000

-2000

-1000

0

1000

2000

3000

4000

Copper revenue


75% monitor resale

Demanufacturing

Repair Labor

Scrap handling

If copper and lead returnedto 1900 prices, and monitors wererepaired at 75% rate

Countries with high reuse and no mining subsidies have the advantage



Overseas Monitor Management$ spent and earned per 1000 monitors

-1000

-500

0

500

1000

1500

2000

2500

3000

3500

Copper revenue


75% monitor resale

Demanufacturing

Repair Labor

Scrap handling

No mining subsidies, and 10%technical and handling labor cost

Countries with high reuse, no mining subsidies, and low wages are the winners



1) Keep 1/3 domestic2) Evaluate exports3) Keep records4) Evolving standards

Chapter 3: Know your supply



Understanding your own supply

1) Pristine takeouts for auction, clean scrap- you can deal with anyone directly

2) Toxic Junk, Contraband, leftovers- you should insist on domestic processing

3) “I dunno”…Mix of good, bad and ugly- you should deal with USA company with capacity to separate, process and market, and get documentation




1) Pristine takeouts, off-lease equipment (Reuse material)Highly Sorted Working and repairable monitors, P2s+, cords, peripherals, cartridges

positive revenue

dollars per item (not pennies per pound)

high overseas demand, with incentives to hide it from tariff collectors and anti-gray-market enforcers

Working monitors-No screen damage-No VGA-No Apple-Make, Model, COM,-Year, other tech details




2) The Dregs: • Cherry-picked material, TVs,

obsolete equipment, residue, shredded or baled material.

• Damaged CRTs• Pennies per pound• Overseas demand based on

copper, gold and aluminum content

One USA company sold good stuff to one export market, and (misrepresented)bad stuff to another




• “I don’t know”: Then make sure the company you select has capacity to handle either type of E-Scrap.

Working monitors

“Crapple” “We’re switching to flat screens”One fellow insisted his 1990 public schoolStuff “works as good as when it was new”.

Another commercial client insisted that working monitors, replaced by flat screens,should be recycled/destroyed here in the USA.



4 Simple Due Diligence Tests

• Glass recycling records• Gold bearing scrap records• Sample manifests (declared reuse items)• Employees or capital investment per ton



1. CRT Glass Test - no known market in Asia for screen burned, scratched or busted tubes. Legitimate USA recyclers must be able to show where the non-repairable glass goes.

Guidance document at retroworks.com, several other sites



2. Printed Circuit Board (PCB) Gold Test - Nasty recycling (and nastier mining) practices. We do all Printed Circuit Boards domestically.

Q: Will this lead to more mining?A: Gold mining is maxed out already

Reuters: chinese minerBAN: chinese circuit board / gold recycler



3. Truth in Exporting Test - Ask for shipping manifests (sensitive market info can be blocked out). Legitimate bill of lading shows make/model/voltage/COO/condition. DHS will enforce existing high tech export rules, customs declarations. How picky ? “Picky is good”

If “for repair”, is it wrapped, tested, sorted and manifested?

One export market included a carton of cigs in every sample photo of e-scrap they are soliciting at high prices. Hmmmm.



4. Employment / Capacity Test - How many tons did the company handle last year?- How many employees per ton?- If fewer employees, how much automated processing equipment is

in place?

One NE company has 2 employees and ships 1000 containerloads per year

This container certainlyhas several hundred cords,power supplies, and hard drives which could be reused - but it’sTAR, an abuse of reuse.



4 Ethical Questions

• Is there a limited number of environmental dollars?

• Is the Perfect the “enemy of the Good?”

• Does Environmental good justify tariff avoidance?



• mineralpolicy.org

• mpi.org.au

• USGS.gov

• moles.org

• ban.org

• copper.org

• www.antigraymarket.org • these and other links www.retroworks.com

Documents

American Retroworks Inc. Middlebury, VT Supply and Demand in the International Marketplace Navigating the Export