MetalX shifts focus with BlueScope transaction
In November of last year, Australia-based steelmaker BlueScope announced that it had entered into a binding agreement to buy the ferrous scrap recycling business of Waterloo, Indiana-based MetalX LLC. The steelmaker describes MetalX as “the leading supplier of scrap feed” to its Delta, Ohio, electric arc furnace (EAF) minimill, North Star BlueScope Steel.
BlueScope paid $240 million to acquire MetalX’s ferrous business. The deal closed Dec. 17, 2021, and the acquired business will operate as BlueScope Recycling and Materials.
Although this sale marks the end of the ferrous business for MetalX, Danny Rifkin, founder of MetalX, says the company plans to continue to grow its nonferrous business.
“BlueScope has agreed to buy our ferrous business, which would include all of the assets and facilities related to buying and selling of ferrous scrap. The people that have been in our ferrous organization are becoming BlueScope employees,” Rifkin says.
MetalX currently operates four facilities—one in Delta, which exclusively handles ferrous scrap; one in Waterloo, which handles ferrous and nonferrous scrap; one in Auburn, Indiana, which exclusively handles nonferrous scrap; and a small retail community recycling facility in Fort Wayne, Indiana. Rifkin says BlueScope will acquire the Delta and Waterloo facilities, and the nonferrous business from Waterloo will now transition to Auburn.
Increasingly, steel companies have been vertically integrating by acquiring scrap processors to secure the ferrous scrap needed to feed their mills. Rifkin’s previous company, OmniSource, was acquired by EAF steelmaker Steel Dynamics Inc., with that deal closing in 2008.
“This trend is going to continue,” he says of steelmakers’ vertical integration. “You think about it, it goes back to when we had OmniSource and the first deal with Steel Dynamics in 2007. That trend has been continuing. It’s really been accelerating over the last 15 years. As we look at all the new steel capacity that is coming online or announced and the fact that most of it is electric furnace melting, it has become more and more important for the steel producers to be able to have a secure supply of the scrap as a raw material,” Rifkin says
He continues, “I think the smaller ferrous scrap operators, the more local or more regional operators, will always have a place when it comes to the collection of scrap, processing of scrap and ability to market scrap. But I see it [being] challenging for companies in the ferrous scrap business to try to scale up to a larger position today as an independent because it’s difficult to compete, especially in the prime industrial world, with the steel-mill-owned scrap companies for all kinds of reasons.”
Rifkin says he sees a lot of opportunity for MetalX to grow its nonferrous business. The company currently handles more than 200 million pounds per year of nonferrous scrap.
“Our plan is to execute a growth strategy focused as a nonferrous company,” Rifkin says. “We’re splitting the ferrous business out and continuing on as a nonferrous business.”
He continues, “We have been working on developing a more extensive nonferrous strategy for some time. We see tremendous opportunity for the future in the nonferrous segment, especially related to copper and aluminum. So, as the world moves towards more electrification and lighter weight, and as the use of copper and aluminum becomes more prevalent in everything, we see that as an outstanding opportunity for long-term growth for the company.”
As part of MetalX’s nonferrous growth strategy, Rifkin says the company wants to expand its copper and aluminum wire chopping business. “We’re planning to double that business over the next year.”
Rifkin says the company also wants to grow its aluminum shredding and advanced separation technologies. He says, “Our primary thrust in aluminum is to be developing the applications for that technology and working with consumers in the extrusion and billet making segment as well as the primary sheet producers to continue to grow that segment of the business.”
MetalX also will focus on aluminum melting, which he says is integral with processing aluminum scrap.
He concludes, “My son, Neil, and I founded this company in 2012, and we’ve been at it again for nine years. We are committed to this industry and the future, and we’re really excited about the prospects as we look in this new direction. We’re able now to focus on one segment and think that will produce really, really meaningful results.”
Aurubis taps SMS to construct Georgia recycling plant
Aurubis AG of Hamburg, Germany, and the SMS Group of Dusseldorf, Germany, have signed a contract for the construction of Aurubis Richmond, a multimetal recycling plant in Georgia.
Aurubis announced its plans to build the plant Nov. 10, 2021, noting construction would start in mid-2022 in Augusta, Georgia, in Richmond County. Upon commissioning, which is scheduled for the first half of 2024, the plant will process about 90,000 metric tons of complex recyclables per year.
The two companies have agreed to work together on the greenfield project, with the SMS Group planning the facility concept, delivering it and implementing it on-site. The SMS Group also is delivering the technology for the top-blown rotary converter, or TBRC, which Aurubis describes as a state-of-the-art piece of equipment for processing complex recyclables to recover copper, nickel, tin, zinc, precious metals and platinum group metals. The scope of delivery also includes the sampling and off-gas cleaning facilities.
The construction of Aurubis Richmond is the starting point of a longer-term collaboration between the two companies.
Aurubis and the SMS Group also signed a cooperation agreement through which both partners say they will be able to quickly implement the planning, construction and development of additional modular recycling facilities in Europe and North America in the case of a positive investment decision from Aurubis.
“With the investment in Aurubis Richmond, we reinforce our ambitions to continue expanding the recycling of complex, valuable metal-bearing materials and returning them to the material cycle,” says Hans Rosenstock, managing director of Aurubis Richmond.
Rosenstock continues, “The SMS Group is an extremely competent partner for the setup of the site, a partner that will support us in implementing custom-fit solutions for ecologically sustainable business activity and accelerated decarbonization.”
“We’re pleased to bring the state-of-the-art recycling plant in Richmond to life, together with Aurubis,” Michael Rzepczyk, a member of the management team at the SMS Group, says. “In addition to technological expertise, we’re united as partners by our strategic orientation toward continued growth in the circular economy and the recycling business, as well as contributing to climate protection with new technologies. Furthermore, our intelligent and efficient digital concepts enable us to optimize the production processes. This modular facility sets new international benchmarks in recycling electronic scrap and is planned for additional sites as well.”
With the construction of Aurubis Richmond, Aurubis says it is tapping a market with strong growth potential and expanding its international integrated smelter network. The investment of about 300 million euros, or $33.8 million, also will help Aurubis meet its sustainability targets. Aurubis Richmond is expected to generate an annual contribution to earnings before interest, taxes, depreciation and amortization of about 80 million euros, or $90.2 million, at full production capacity starting in fiscal year 2025-2026.
The site will process circuit boards, copper cable and other materials containing metals into 35,000 metric tons of blister copper annually, the company says. Aurubis will further process the intermediate products into various industrial and precious metals at its European smelter sites and also will sell them directly in the U.S.