From a to zinc: a long-time research site in Indiana is now ready to de-zinc shipments of galvanized scrap steel. (2003 Ferrous Scrap Supplement).

Following a prolonged research and start-up phase, a galvanized scrap "de-zincing" operation is up and running, ready to start a steady production schedule. Capital investments and expertise from around the world have gone into the effort, with the results still uncertain.

Both generators and consumers of ferrous scrap will be watching the progress of Meretec, East Chicago, Ind. The current owners of the company, which previously operated under the name Metals Recycling Technologies Inc. (MRTI), are ramping up production of their process, which is yielding de-zinced "black scrap," which is preferred by iron foundries, as well as a zinc flake product.

The company's East Chicago facility is now accepting shipments of galvanized scrap trimmings from regional stamping plants and removing the galvanized zinc coating to produce a foundry-quality grade of steel scrap.

TWO COMMODITIES

The Meretec process has been designed to create two marketable commodities: the de-zinced ferrous scrap and a zinc flake product that can be marketed as a premium secondary zinc grade.

In some respects, the process can be compared to de-tinning, another solvent-based separating process that yields both a ferrous and a nonferrous secondary product.

De-tinning has been used for years on prompt factory scrap from tin mills to recover both the tin for re-use and the de-tinned ferrous scrap. The solvent-based process was initially most effective on flat trimmings of tin-plated scrap, as the solvent more easily coated the flat pieces, and the solvent's chemistry gauged to match the uniform material introduced into the process.

Similar considerations have caused Meretec to concentrate on prompt galvanized factory trimmings instead of the larger but more complex stream of post-shredder galvanized scrap.

"Our initial target market is the automotive industry, where up to 30 percent of the galvanized steel supplied to stamping plants immediately becomes scrap in the form of off-cuts," says Gunnar Skoog, president of Meretec.

"Our goal is to process the scrap galvanized steel from the stamping plants and to supply foundries with the resulting high-grade melt stock," says Skoog. "The zinc that we recover is our very own product--highly reactive Meretec zinc, a premium product with a premium price."

Skoog estimates that the de-zinced steel scrap could fetch up to $30 or $40 per ton more than it would as galvanized scrap. The Meretec zinc, "should sell at the LME price plus something, but we don't know plus what yet," says Skoog.

Meretec estimates that the average ton of galvanized scrap should yield about 40 pounds of zinc flake product for outbound shipment. The plant has the capacity to process up to 115,000 metric tons per year of scrap, with expansion possible.

NEW AND UNTESTED

Whether Meretec will meet with enough success to expand its operations is the question.

Pioneering a new technology is risky, as predecessors at the East Chicago site have learned in earlier efforts to establish a successful de-zincing operation.

The effort to establish a de-zincing facility in East Chicago goes back to the mid-1990s, when earlier pilot projects stalled and the company known as Metal Recovery Technologies Inc. ultimately filed for bankruptcy.

The current Meretec effort is backed by venture capital interests based in London. The project has become a global effort, both in terms of funding and the importation of overseas talent such as Skoog.

Despite the discouragement of earlier failed de-zincing efforts, a successful parallel can perhaps be drawn to the de-tinning industry.

As noted earlier, de-tinning has been an established process within the metals industry for decades. In fact, a portion of Meretec's East Chicago site once housed a de-tinning facility.

Initially, the de-tinning process was confined to prompt scrap, but technological advancements have allowed the considerable post-consumer steel can stream to be eligible for de-tinning. Post-consumer cans can be shredded and further processed into flat pieces, a shape more conducive to de-tinning through a solvent-based process.

On its Web site, AMG Resources Corp., Pittsburgh, claims to be, "the world's largest de-tinner." The company's processes yield a product that is 99.98 percent pure tin, which company president Allan Goldstein calls, "The purest commercial tin produced in the world."

The company's methods have been modified and added to, according to Goldstein, to accept post-consumer cans. "We developed a system that takes contaminated cans and produces a 98 percent pure ferrous product for de-tinning or as a feedstock," according to Goldstein.

Meretec has put together an innovative process to de-zinc its galvanized plant trimmings, but if it wants to meet its goals to de-zinc higher volumes of scrap, it may ultimately have to design a system that will let it effectively de-zinc post-shredder material.

The challenge in doing so will be both technical and financial, one metallurgist contacted for this story noted.

On the technical side, Meretec needs to make sure its process remains workable on scrap full of folds and creases, or it will need to flatten post-shredder pieces.

Additionally, scrap derived from obsolete automobiles contains oils and other contaminants that could hinder the solvent-based process used by Meretec, says Dr. Richard Burlingame, a consulting metallurgist from Cleveland.

On the cost-control side, a challenge in using post-shredder scrap is a reduction in the zinc yield. If a ton of prompt galvanized scrap yields 40 pounds of zinc, a ton of post-shredder scrap will likely yield just one-quarter or one-fifth that amount, as much of the post-shredder stream consists of non-galvanized steel and iron. A lot of scrap metal would be going for an expensive ride along with the galvanized steel that yields the zinc.

Hurdles such as these have been overcome by recyclers in the past, and Meretec will be motivated to do so if the returns on its initial products cover and exceed its processing costs.

As with de-tinning, the resulting ferrous product should be a desirable feedstock for melters of ferrous scrap. The zinc flake is also being billed as a premium product, although the profits it yields will depend in part on the LME cost of zinc.

The recent trend in LME pricing has tin trading in the $4,200 per metric ton range and zinc trading closer to $800 per metric ton. This higher value of tin is one of the reasons de-tinning has remained a viable process.

LOOKING AHEAD

Currently, Meretec officials say they will work with scrap processors and brokers to procure as much prompt scrap as possible, with a focus on stamping scrap. "Here in East Chicago, we are at the center of the U.S. automotive supply industry," says Skoog, noting that a Ford stamping plant is just a few miles away and that Meretec's initial shipments of scrap came from a Great Lakes region General Motors plant.

Skoog remarks that the company has enough property to eventually install its own shredder, which would open the way to accept additional forms of scrap.

The investors who have watched the current management team turn a long-time research project into an operational facility are eager to see a return on their investment, either in the form of a profitable business or in the sale of the Meretec plant to an outside buyer.

"2003 will tell to what extent we can build the business and start expanding," Skoog declares.

The author is editor of Recycling Today and can be contacted via e-mail at [e-mail].