E-Scrap News Magazine: In scrap electronics, going for gold is getting harder

In scrap electronics, going for gold is getting harder

By Jared Paben, E-Scrap News

September 11, 2015

In this time of depressed prices for gold and other precious metals, industry operations are being forced to reconsider their business models, according to experts at an E-Scrap 2015 session on the shifting materials stream.

Joe Clayton, vice president of sales for MRP Co., said circuit boards have been the "bread and butter money maker for our industry," and many e-scrap companies have built their businesses around mid-grade boards, or those with a gold content of 100-200 grams per metric ton.

In many cases, other commodities would pay a company's building and labor costs, and the mid-grade boards provided the profit, Clayton told the crowd at the "Wading Into the Materials Stream" session at last week's conference in Orlando, Fla.

But that business balance is no longer a sure thing. For one thing, equipment manufacturers are making slimmed-down products with technologies that use lower volumes of precious metals.

Another speaker at the session, Thierry Van Kerckhoven of Belgium-based Umicore, said as the electronics stream evolves, gold is becoming harder for e-scrap entities to harvest. The e-scrap landscape "is not a Klondike," he said.

Umicore has several suppliers that have been manually disassembling and sending computer circuit boards to Umicore for years, allowing the company to measure metals content over time. The amount of gold and silver in high-grade boards dropped 40 percent from 2003 to 2013, according to Van Kerckhoven's presentation.

Clayton echoed that sentiment, noting more and more motherboards entering the stream are slipping into the low-grade board category, meaning they contain less than 100 grams of gold per metric ton.

High-grade boards, or those with more than 200 grams of gold per metric tons, are even rarer.

At the same time, gold values are lower than they've been for several years, although they're still up when one takes a longer-term view. Gold prices have come down almost 17 percent in the last year and more than 40 percent since September 2011, when they hit a high of about $1,900 dollars per ounce, according to Clayton's presentation.

If an e-scrap firm had circuit boards sitting in a warehouse on June 30 and they sat there through July, the value of the gold dropped 7 percent, Clayton said.

Still, precious metals prices are higher than they were in 2003, according to Van Kerckhoven. Gold from high-grade boards, for example, is worth roughly twice what it was worth a decade ago.

Clayton, who serves on the R2 Advisory Committee and is a chairman of the Electronics Division Committee at the Institute of Scrap Recycling Industries, offered some tips for weathering the low prices.

"In a down market, it's best to ship more frequently," he said. It could mean shipping without a full load, but it's better than losing a lot of the material's value, he said. He recommended emptying warehouses every month, if possible.

Clayton closed by recommending e-scrap firms identify reusable items in their existing streams and consider partnering with an asset recovery company. E-scrap firms should train their staff to be gentle on reusable items and ask customers to handle scrap with care – even offering to pack the materials for them to ensure proper handling they're potentially valuable enough, Clayton said.

"A resold laptop is worth probably 50 times scrap value," he said.

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