While many copper refineries in developed markets such as Western Europe and North America have shut their doors throughout the past three decades, the Metallo Group has demonstrated remarkable survival skills.
Using the slogan “The furnace of innovation” to help explain its place in the market, the group has continued to melt predominantly low-grade copper-, tin- and lead-bearing scrap and byproducts at its facilities in Belgium and Spain throughout all types of market conditions, challenges and dynamics in global scrap flows.
During the last two decades in particular, as China and other parts of Asia have absorbed growing amounts of nonferrous scrap, buyers for Metallo have continued to scour the planet for grades of copper, tin and lead scrap they can bring to Western Europe to refine and convert into marketable products.
The company was family-owned for much of its history but is now owned by New York-based private equity firm TowerBrook Capital Partners, which has supported the Metallo Group’s strategic initiatives.
Formulating a strategy
“The furnace of innovation” slogan alone could not have helped Metallo survive without the considerable amounts of thinking and reinvestment that led to its current business model.
In 1919 the company started out as a copper sulphate producer before expanding into the production of copper anodes and cathodes and then into the production of tin and lead ingots. Today, Metallo continues to position itself as an innovator in multimetal recycling and refining processes, says Jurgen Van Gorp, a senior buyer for Metallo, who also has business development responsibilities with the group.
“Instead of focusing on the refining and melting of what have become traditional commodities like high-grade scrap and radiators, we started to increase our know-how and experience with low grades and more complex materials,” Van Gorp says.
“We have invested a lot in the know-how, technology and the fine-tuning of our operations at our plants in Beerse, Belgium, and Berango, Spain,” he adds.
Working with such specialty grades of scrap was to some extent necessary, Van Gorp says. “If we had continued to be a traditional operator, the competitive climate would have been very difficult. So, we focused on these materials that our competition had no profound interest in in order to stay ahead of the game.”
He says the portfolio of complex materials sought by the Metallo Group is “seemingly endless.” They include refinery skimmings, drosses, ashes, fines, muds, off-spec materials, refinery chops, contaminated solids and turnings, meatballs and copper- or tin-clad steel.
The company has survived by melting these materials while also meeting the strict clean air and emissions requirements of the European Union. “We work with the best available technology,” Van Gorp says.
The environmental compliance steps the company takes are considerable and apparent to a visitor, he says. “If you take away all the filters, insulation and air quality systems, we actually have a much smaller operation to look at,” Van Gorp remarks.
Before material is melted, a prepping process starts with the arrival of scrap. Inspecting and analyzing the various materials that arrive at its facilities makes for the first step in a careful process conducted by Metallo as it turns low-grade scrap into high-grade metal products.
The receiving departments in Beerse and in Spain see a wide variety of materials arriving for inspection in any given week.
“High-grade materials are visually inspected and documents are checked, and then they are staged for later blending and melting,” Van Gorp says.
The process for the lower-grade materials in which Metallo specializes carries some extra steps. “Drums and big bags are emptied and, depending on the quality and physical shape, we work on visual estimation or with spectrometers, or we have to take a representative sample,” he says. “That sample, once prepared, will go to our laboratory for analysis.”
An assay report with those results, along with the weight, is sent to the seller to determine payment. Suppliers can indicate before arrival of the goods at both facilities if they want to be represented by neutral surveyors.
In a nut shell, Van Gorp says, the production processes can be broken down into three major steps:
- Oxidic materials are smelted by reduction phases on one side into metal, containing mainly copper and more precious elements, and on the other side into iron-silicate slag.
- The individual metal components are separated by oxidation and conversion using TBRCs (top blown rotating convertors). During this step, natural gas and oxygen are being used.
- Metal products are refined, with anode copper being cast into anode molds to supply the tank house, resulting in cathodes. Tin and lead are separated from the anode copper in a first step, while in a second step tin and lead are separated from each other through vacuum distillation. The refining of tin and lead is done through proven refining standards.
Using its variety of smelting and refining processes, Metallo is able to produce about 10,000 metric tons of copper anodes and about 3,000 metric tons of copper cathodes monthly at the plant in Beerse.
The company also produces about 2,000 metric tons of soft and hard lead ingots and up to 1,000 metric tons of tin ingots monthly. “It makes us the leading producer of pure tin in Europe, which is all “low lead” (less than 100 parts per million) and London Metal Exchange (LME) registered as “MC” brand,” Van Gorp says.
Making a name for itself
In addition to its technical research and investments, the Metallo Group has exerted ongoing efforts to cultivate a steady and constant presence at recycling industry meetings and conferences, such as those held by the Brussels-based Bureau of International Recycling (BIR) and the Washington-based Institute of Scrap Recycling Industries (ISRI).
“With the furnaces we have and the corresponding capacity, we are always in the market looking for raw materials on a consistent basis,” Van Gorp says.
With its European heritage and locations, that continent remains its most active arena. “Our finished materials primarily go to Western Europe,” Van Gorp says. “There is a strong demand over here since Europe is a net importer of most base metals.”
Global competition, stricter emissions laws and the rising cost of labor in the European Union have left Metallo with very few direct refinery competitors in Europe. However, on the scrap supply side, those same factors also have reshaped the overall European industrial landscape.
“The availability of residues within the EU is shrinking, following more efficient metal usage during manufacturing,” Van Gorp says, “so we have to look abroad to source material on a global scale.”
Longer supply lines mean longer business trips for Van Gorp, and longer voyages for scrap feedstock, such as 20 to 30 days for material to make the trip from North America.
From 2008 to 2016, he says Metallo “has been able to get a better position in the United States.” When Van Gorp began traveling to North America in 2005, he says he “had to fight for” Metallo to gain some market share in the United States.
Van Gorp says the company is not looking at the market defensively but rather still sees opportunities. “There is potential to grow,” he adds.
“Our success as buyers goes hand in hand with the efficiency of our back-office team,” he says of the overall commercial structure. “The challenges in the metals refinery sector remain numerous,” Van Gorp continues, “but we have a well-weathered team, capable of dealing effectively and efficiently with the many stresses related to overcoming those challenges. In the end it is accurate to state that it is not just the result of one particular department to which we can accredit the success of the Metallo Group. Rather, it is always the result of a joint company effort as a whole.”
Van Gorp continues, “Given the tightness in scrap availability and the overall state of the economy, it all results in a pretty competitive business environment. It is up to us as buyers to be present the moment materials are offered to the marketplace and make sure we buy the units we can use.”