If India needs to reap benefits of a truly “green” metal production ecosystem, it would need to step up its efforts in chasing every scrap supplying resource” Dhawal Shah, Sr Vice President, MRAI
Recently India broke a record of 122 years… not something that we are too proud of ! March 2022 was officially declared as the warmest month in India. Similarly a very reputed study group has predicted 9 coastal cities of India to be swallowed by the oceans by 2030, as they shall fall below the tide-level. This includes the bustling, financial capital of India i.n. Mumbai – where I live. Time is ticking.. and it would be dire straits if no progress is made.
To mitigate this – a lot is expected from all manufacturing industries here to work alongside the government, and help achieve the goals set out of India becoming carbon neutral by 2070. Most companies would be going to the war room, and finding ways to immediately, & radically transform themselves – either by replacing their source of energy (if its fossil fuel driven), and /or curtailing emissions at every stage of their production processes. Similarly consumers also would have to bring a monumental change in their behavior, when it comes to their discards, and the product journey thereafter.
Today every government discussion, internal or external – words like sustainability & de-carbonization resonates a lot. So what they call “low carbon” or “green” – we simply call it scrap!! And I say it with even more conviction that our industry is perhaps the biggest and most effective artillery that always has. and will continue to help, in combating the perils of global warming.
I have been associated with the metal recycling industry for the last 25 years. I consider this industry to be the rock bed of India’s socio-economic, & environmental transformation. This reason I say this is because:
- 35~40% average contribution to the total output of all non-ferrous metals
- 25000 small, medium & micro units – over 20 lakh direct/indirect employment
- It’s a pan-India activity or industry – cutting across every section of society
- About 30% of workforce are skilled women, who specialize in scrap metal sorting
- At a combined average of all non-ferrous metals, we use 1/5~1/8th of energy. There is almost zero waste discharge
- The carbon footprint is about 5~10%, compared to primary production, through mined resources.
So despite all its inept goodness, we end up with a sweet bitter feeling.. Sweet bcoz of the positive impact we bring along (as mentioned above) to the society, & environment. and bitter because we find there is still a disconnect with government, in having them openly accept, and recognize the need of recycled metals, and actively do policy intervention – to push its usage in this country.
A story has been fabricated by the primary producers which says that our quality is sub-standard. To counter this, let me take the example of secondary Aluminum in India, which is the biggest of all non-ferrous metal producing industries here.. You may note that..
- About 60~% of our output is meant for auto die-casting. We supply to world class companies like Maruti, Bajaj, TVS, Hero, or their OEMs. Today we export about 25% of our ingot production to countries like Japan, China, etc.. Aluminum components made from secondary Aluminum are also being exported around the world. So what makes them say that our quality is sub-standard?
- About 10% of our output is meant for the steel industry, who use de-ox ingots made from scrap. We supply to steel plants like Jindal, Tatas, SAIL, etc.. We also export our de-ox wire rods, shots, pyramids & ingots. Again, with zero quality issues.
- Another 10% is catering to the building & construction industry, mostly in form extruded, architectural products (windows profiles). You do not hear customers talking of bad quality there ?
Similarly for Lead – where 75~80% is meant for auto & industrial batteries. Customers like Exide, Amar Raja, Luminous & several others are using our material for their production of batteries. Indian refined lead is exported around the world. Its widely recognized, and accepted quality. Infact some of the producers have even achieved LME approval, and are qualified to deliver into LME warehouses.
Today almost the entire Brass production in the country is through secondary routes.. Jamnagar alone.. with about 3000 micro industries – is churning out about 15000 mt of production per month. Our Brass components are being exported around the world.. used in high class engineering.. & sanitary fitting application. So bad quality cannot find roads into such applications.
So, in most end applications – secondary, or recycled metals are consistently performing well, and are seeing positive growth – which does not serve the business interest of primary producers.
India’s consumption story has just started to take off, and we intend to become a 5 trillion dollar economy by the end of this decade. Today our per capita consumption of metals is significantly lower than the world averages. We do not have enough scrap generated, due to low base. Therefore, we import scrap from overseas. In an attempt to have non-tariff barriers, it is said that foreign scrap is being dumped in India. The fact of the matter is that the entire value chain is largely working on pre-processed industrial scrap.. about 65~70% coming from Western countries. In fact there is a wave of economic nationalism on scrap going on right now.. as every country (including major exporters) are now trying to hold back its scrap export because they find this to be a fantastic resource material for own consumption – the best way to off set.. or reduce their carbon footprint.. and go more green! Infact EU’s proposed Green Deal is aiming to stop scrap exports from the EU to non- OECD countries. Over the last 2 years – there has been no new capacities being added through primary routes (using mined resources), and most countries/ companies are implementing a structural shift to recycled metals. In Fact there have been over 2 dozen big secondary plants, mostly green fields.announced by international, giant metal producing companies.. including Aluminium companies like EGA, HYDRO, ALCOA, Rio Tinto, INALUM, etc.. – who would be using scrap as their infeed. Also China has reduced their primary Al production capacities by about 2.5 million tons, and is quickly ramping up their secondary Aluminium production to over 10 million tons, from the current 5~6 million tons.
So where is all the scrap going to come from ? If India needs to reap benefits of a truly “green” metal production ecosystem, it would need to step up its efforts in chasing every scrap supplying resource – imports & domestic alike.
Since 2017, MRAI and other associations have been arguing with the government on the need of establishing new Indian standards on metal scraps – an idea pushed by the primary producers. At MRAI, we have always believed that focus should always be towards recyclables, and non-recyclables. Emulating some other random country’s scrap grading systems – is not serving the interest of our industry – as the purpose, and the needs are different. A strong, vibrant metal recycling industry does not warrant for high purity, furnace feed materials. It rather thrives on the ability to sort / segregate most complexed scraps, and extracting maximum value from every element – without creating any burden on the environment. Our processes prove that our downstream products are able to deliver highly acceptable quality globally, across applications. Therefore we must rather look at how India can become a global hub for metal recycling, by enhancing its investments, & infrastructure… including any disposal mechanisms (if required), which no government wants to willingly address. We could then even further strongly penetrate global export markets for intermediate and downstream products. And this is not just too fancy a picture to visualize, as India has the skill, the mindset, financial resources, and ability to deliver. Currently our industry contributes a little over 2% to the GDP, and this can easily be scaled up to 7~8% over the next 10 years. This is rather our golden chance.. and we must capitalize on the same.
In the end, we all should understand that India is a very frugal economy. Maximum recycling happens here.. as everything which has value.. is sorted.. segregated with skilled human hands – and used for our consumption. Besides profitability for companies – the net result of this activity is a national gain as well – in terms of economics, environment, & employment.
With increased capacities, the world is soon going to scramble for more scraps. Whilst we do our best in overhauling domestic supply chains, imports also are helping us in achieving our targets – as maximum value addition is happening in the country. Let’s work together in making India a global hub for metal recycling.