Factors to consider when investing into a new e-scrap smelter

Here at Metso Outotec, we are proud of our eScrap solution, which has multiple benefits for our customers:

• We have the full product portfolio for the whole flowsheet, from raw material to refined metals

• We have our own state-of-the-art R&D facilities that we use to test, develop and optimize flowsheets

• Our experts know e-scrap inside and out – the benefits, opportunities and challenges that come along with it

We understand that interest has grown due to the increased supply of e-scrap. In this article (adapted from the first part of a two-part webinar series), we highlight the feasibility and the factors to consider when you are interested in investing into a new e-scrap smelter.

What is the raw material effect in the feasibility?

On a macro level, we are seeing this overarching picture of very strong growth in e-scrap feed supply due to the increase in electronic waste generation coupled with higher recycling rates. This is creating so called “Urban Mining” opportunities as an increasingly important source of feed material for smelters.

But perhaps the most important question, and the one that inevitably comes up most often for us, is whether there is a potentially viable business in smelting these materials. Inevitably, this comes down to a question of money and looking at potential earnings, costs and investment requirements.

If we take a look at the potential earnings side of the equation, the first key factor to be considered is availability of the feed materials. This is something that is common to any smelting project, but can be considerably more difficult with an e-scrap project where the feed materials will almost inevitably be sourced from a wide range of sub suppliers in small and variable size lots, and can be expected to change over time.

Then there is the question of margins associated with the feed material that may be available and these can vary considerably. Earnings opportunities can be realized through a combination of treatment charges, that is the fee paid to process the raw material; free metal, that is value of metal recovered beyond the paid recovery level, as well as any unpaid byproduct metal values. There could also be penalties levied on problem elements, such as antimony. An interesting development we may hear a lot more about in the future are potential green metal premiums that could add to the revenue creation opportunity.

It is interesting to compare the inherent contained metal value in different types of copper bearing feed materials. At current metals prices, a typical high-grade e-scrap material has the highest contained metal value, but a large proportion of this value comes in the form of precious metals. Relatively high grade copper scrap, such as No.2 quality, is not far behind in terms of overall metal value, but the value is all in the copper.

It is most important to note that local market conditions always need to be taken into account in assessing any specific project, and margins can be quite variable. Therefore, this kind of economic data provided in this article should be taken as general and indicative only. 

Commercial feasibility

In terms of key economic considerations, the first requirement is to establish a potential raw material supply base and to evaluate the potential income.

Inevitably materials that come with higher margins are more challenging and costly to process. We do use our own in-house operating cost models, but these always need to be validated for any specific project based on each feed mix and local unit costs.

Operating costs

What is interesting with processing e-scrap is that it comes with its own energy source in the form of the plastics and organics associated with the e-scrap. The need for supplementary energy can be minimized by using this inherent process energy effectively.

Metso Outotec plants are also designed to minimize operating labour through high levels of automation. Still a lot of labour and cost can be involved in the feed receipt, sampling and preparation areas which are more complex than a primary smelter. Specifically when dealing with materials with high precious metals, this part of the operation can be the key to success or failure of a business.

Another significant part of the operating cost is also associated with operating the emission control equipment. Overall, we expect that a healthy margin can still be realized for smelting e-scrap after deducting the operating costs, which we estimate could be around the level of 200 EUR/tonne as an indicative cash figure (excluding refining charges). We do tend to see that fixed costs as a proportion of the overall operating cost are higher for e-scrap smelting compared with primary smelting, thus the operating costs can vary quite significantly with plant scale.

In terms of CAPEX, unfortunately building any smelter is never a simple or cheap exercise and often involves lengthy permitting and significant capital investment. Capital costs are a function of many factors, not least of all location, plant scale and plant complexity. Large scale plants can run to many hundreds of millions in investment outlay. Even smaller plants, which are detailed further in this article, still run to tens of millions in investment.

We see three main factors as the most common reasons that many projects in this space don’t get off the ground:

• Sufficient certainty over feed supply

• Capital cost and investment return hurdles

• Environmental permitting hurdles

Therefore, undertaking a comprehensive market assessment to understand the availability of materials and the commercial terms that may be expected is a critical first step in any smelter project. Then comes the technical definition, cost estimation and environmental permitting study work needed as the proper foundation for any project.

What is the smallest feasible size for a stand-alone smelter?

We see that reducing the number of process steps and simplifying the plant as much as possible as one way to limit the costs and potentially enable small scale smelting. This would involve either producing a raw copper product, such as adding some higher grade copper as a collector to be finally refined at other location or potentially employing a simplified hydrometallurgical plant to target precious metals recovery. One possibility could be to start the smelting operation and later add the refinery processes to incrementally develop the operation and stage the capital expenditure.

We also see that precious metals are the key to the profitability of any smaller scale smelting operation, and this requires targeting an e-scrap feed mix with relatively high values of gold and PGM’s. Our indicative economic feasibility work shows potentially 10,000 t/y of reasonable grade e-scrap could offer a reasonable basis worth investigating further. Just as an indication, we would see around Au + PGM values of >100 g/t could enable these kinds of smaller projects.

As a very rough indication of the investment that may be associated with a small smelter, we have estimated EUR 35M for the process equipment. A very rough OPEX figure for this kind of simplified scheme could be of the order of 200 EUR per tonne of raw material, which would cover the main smelting and gas cleaning, but exclude feed preparation or downstream processing.

As always, the commercial terms for the actual materials are critical, and these will vary from location to location. One thing we increasingly see is that regulations may limit the export of these materials and the transportation of any kind of material defined as hazardous waste is becoming an extremely complex and costly exercise. This may drive local processing of e-scrap in smaller scale plants, compared with the larger scale and more centralized business model that we see in primary copper smelting.

Integrating an e-scrap smelter

Adding an eScrap smelting unit into an existing smelter gives the opportunity for the smelter to increase revenue. This is by improving feed sourcing flexibility and potentially a capacity expansion to supplement the primary smelting unit.

Even processing limited amounts of e-scrap can be a good economic opportunity, but one particular advantage available to an existing smelter is that installing a separate eScrap furnace will also provide additional flexibility to process other secondary raw materials, such as in-plant intermediate products or residues like dusts, sludges, slags and reverts. This approach can also enable the treatment of more complex and higher margin concentrates to enhance the overall flexibility and profitability of the smelter. Cashflow can be improved by processing difficult materials that often end up in stockpiles in existing smelters, and using the energy inherent in e-scrap to smelt revert materials should be a very attractive option.

Integrating an eScrap smelting unit into an existing smelter also allows the investment cost to be kept down by utilizing the infrastructure available with the existing smelter, such as the electrical power supply, water supply, water treatment plant, warehousing, slag and waste product handling facilities as well as logistics. Another very important advantage is the possibility to utilize in-house operational know-how of hot metal processes that can help achieve a smooth commissioning and ramp up of the new unit. Finally, there is also the potential benefit through holding operating licenses and permits and navigating through the often complex permitting and approvals processes involved in implementing a smelter.

Looking at these advantages, it could be argued every existing smelter should be looking at adding e-scrap smelting capability, but there are some equally important risks to be considered.

First is confirming access to raw materials and verification of the economic benefit. Then, there is the importance of understanding how the e-scrap smelter may be integrated efficiently and interact with existing smelter operations. Introducing new feed materials with different impurities requires pre-requisite technical work. On one hand, there may be a great opportunity to utilize the existing flow of copper to absorb a relatively small amount of an additional precious metals rich copper stream, but also coming with elevated levels of impurities and perhaps different impurities than the smelter may be accustomed to handling. A well planned and executed technical integration can enable the entire smelter operation to be optimized whilst managing the risk to affect existing copper production and quality.

For treatment of higher volumes of e-scrap, investment in developing commercial networks and constructing a pre-processing and sampling facility for the e-scrap would be highly recommended, as proper sampling is so important in realizing the value from these feeds.

Selecting the right technology

The Ausmelt process (left) involves the use of a top entry submerged lance. The furnace is a fixed upright cylindrical vessel with feed typically charged via a port in the furnace roof and molten products are removed via tapholes or weirs at the base. The lance is immersed into the slag bath, generating a high level of turbulence in the process. Fine feed materials may also be injected via the lance.

The Kaldo process (right) involves the use a top blowing lance into a tiltable, rotating furnace. The action of the furnace rotation coupled with the top blowing generates the agitation in this process. Feed may be charged via lance injection or via skip hoist or boats into the furnace mouth.

Both of these processes are highly flexible in terms of the range of feed materials that can be treated. Both are also commercially successful, operating in a number of plant installations. Whenever faced with comparing two very good technologies, the outcome of the technology selection phase often comes down to highly specific factors.

Both processes can be employed in batch mode to take advantage of being able to employ different process conditions in different stages to achieve maximum processing flexibility. One advantage the Kaldo process has is that by using pouring rather than tapping to remove the molten products, this gives added flexibility, such as dealing with very challenging slags. This is important as the successful operation of an Ausmelt furnace depends very much on maintaining slag fluidity, both for process functionality as well as product removal from the furnace. This can even enable a campaign type operation, processing very different types of feed materials in each campaign.

The Kaldo furnace can also take larger feed size pieces and batch charges due to its ability to employ mouth charging, whereas the feed to an Ausmelt furnace needs to be appropriately sized for feeding and also metered accurately for control purposes.

The Ausmelt process lends itself to larger scale operations due to the intensity of its submerged lance operation, and can also operate in continuous mode for certain processes. Any continuous operation will achieve higher throughput than a batch equivalent, but is then limited to a specific set of operating conditions. For example, the continuous smelting of e-scrap through to black copper at high capacity can be implemented with a single Ausmelt furnace.

Submerged lance injection in the Ausmelt process can also offer higher oxygen utilization, energy efficiency and improved impurity removal. This can work very well with certain synergistic combinations of feed materials such as e-scrap and energy deficient oxide feeds.

The Ausmelt furnace can also be designed with additional water cooling to prolong campaign life, though this comes with extra capital cost. In Kaldo plants, a spare Kaldo vessel can be carried and relatively easily changed out to avoid longer campaign shutdowns typically associated with furnace relining. To achieve the same with an Ausmelt plant requires a second installed unit which again comes with an extra capital cost. The Kaldo furnace itself is lower cost unit with a simpler installation, but as the scope and scale of a smelter project is widened, CAPEX differences are diminished.

Customer experience and preference can also heavily influence any technology selection evaluation. As you can gather from all of these factors, we have not been able to come up with a hard and fast rule for technology selection and thus always need to look at each project on its own merits. Having said this, we would tend to recommend Kaldo for smaller scale batch processes and Ausmelt for larger capacity installations as a generalized view.

Combined process = combined benefits

One interesting possibility is combining the two processes to take advantage of the benefits offered by each process. Naturally, this kind of plant would only be considered for a larger scale of operation, but would enable the high throughput and efficiency of the Ausmelt process to be combined with the flexibility and batch capability of the Kaldo process to realize the best from both processes.

Such a flowsheet employs the Ausmelt furnace for treating e-scrap and other revert materials to produce black copper which is then subjected to converting in the first Kaldo unit. Slags rich in lead and tin are then treated in further Kaldo units to recover these values. One advantage we see with this scheme, compared with multiple parallel lines, is that the most difficult gas cleaning duty is confined to the Ausmelt furnace offgas train, that can be designed specifically to take care of these conditions.

Environmental factors to consider

In the past, smelting has carried certain negative connotations from the past. These days, the landscape has since evolved, and the proper protection of the environment is at the heart and forefront of mind in every sustainable smelter operation. However, the smelting of e-scrap still can bring potential challenges relating to the control of environmental harmful impurities, such as managing metal fumes, dioxins, nitrogen oxides, halides, mercury and lead that need to be properly managed.

Metso Outotec has a long experience in designing gas handling plants that conform with the most stringent environmental regulations and this is an area we see our integrated solution bringing special value. The gas handling system is integral to the success of the smelting process, and should therefore be designed with the following principles in mind:

• Minimize the formation of any environmentally harmful components, such as dioxin or furan. This can be achieved by quench cooling the furnace offgas through the critical temperature range where dioxin or furan is catalysed with the halides and metals that are present in the offgas stream

• Collect any problematic components as efficiently and early as possible in the gas handling system. This is also achieved in our wet gas system where dusts/fume and halides are scrubbed from the offgas in a unit adjacent to the furnace

• Any end of pipe type processes, for example a deNOx SCR type process and police filter for mercury removal can be applied for final clean up prior to discharge of the offgas to atmosphere

Another key environmental objective of a sustainable smelting operation is to minimize any other waste stream. In today’s industry, there is an increasing drive to minimize any waste water discharge and preferably to recycle water within the plant in order to minimize fresh water consumption. Metso Outotec has an in-house water treatment team and offers process solutions that can achieve both these objectives by recovering and treating waste water to enable its reuse, and collecting halides into a concentrated salt stream.

Utilizing the slag

When considering environmental factors, there is the important question of whether the slag from an eScrap smelter can be utilized instead of disposed.

Slag is an inevitable byproduct of any smelting operation. Ideally the slag quality produced from a smelter should be of such a quality that it can be sold for use in applications such as grit blasting, cement additive or construction aggregate. Generally, these kinds of markets don’t generate a lot of money, but save the costs associated with disposal of slag as a solid waste. The sale of slag as a byproduct is dependent on local market demand and the impurities present in the slag.

Integrated smelters will be set up to deal with large amounts of slag, as typically each ton of concentrate smelted will generate approximately 600 kg of slag, and many primary copper smelters are treating in excess of 1 Mtpa of concentrate these days. The slag arising from smelting e-scrap is typically much lower overall volume due to the much smaller capacity of such plants, but the specific volume can be quite high (approximately 700 kg slag per tonne of e-scrap smelted) and also elevated in components such as alumina.

Slag cleaning is commonly employed in smelters to maximize the recovery of valuable metals, as well as to meet environmental standards for leachability of the slag. High recoveries of up to 98% Cu and >99% of precious metals can be achieved with the inclusion of a slag cleaning process and if all dusts are treated and recycled within the process. Slags from the smelting of e-scrap can contain high levels of tin and lead that are worth recovering in a dedicated slag cleaning process for the rich slags.

How Metso Outotec can support

So you want to develop a new e-Scrap project – what now? Thankfully, Metso Outotec is here to support you through each of your project phases.

Typically when a project starts, there is an understanding about the raw material base, meaning volume and quality. First step is to define the optimal flowsheet, and that is often done in a conceptual or prefeasibility study. This is a critical phase, and it is done by modelling the whole process flowsheet. If there is lack of input data for the modelling, testing in laboratory or pilot scale should be done. Metso Outotec has the all the capabilities in testing, modelling and conducting these studies.

The next step is a basic engineering or feasibility study to define the process in more detail and to get better accuracy for CAPEX and OPEX figures. This is often the foundation for the final investment decision.

The next phase is the actual implementation project to build the plant. Metso Outotec’s role is to provide the key process equipment and advisory services to ensure the plant is built on time and of high quality. Metso Outotec experts are there to commission and start-up the plant for fast ramp up to design capacity. The deliveries are backed by process guarantees.

Once the plant is in operation, we can support with different kind of services, like process optimization, modernization and plant upgrades. Metso Outotec has the knowhow and capabilities for the whole flowsheet, from raw materials to refined metals, to support our customer through the whole lifecycle of a plant.

This has been transcribed from a webinar by Lauri Narhi, Stephen Hughes and Hannes Holmgren.

In this interests you or you want further information, view our webinar that focuses on the metallurgy of the e-scrap smelting, the challenges and opportunities, and flowsheet development.

This article is part of our Smelting Newsletter Issue 2/2021. Visit the issue front page for all articles and greetings from Lauri Närhi, Head of Sales - Smelting.