The metals recycling industry
Metals recycling is a £5.6 billion UK industry, processing ferrous and non ferrous metal scrap into vital secondary raw material for the smelting of new metals. The industry employs over 8,000 people and makes a net contribution to UK balance of trade.
Worldwide, over 400 million tonnes of metal is recycled each year.
The Scrap Metal Dealers Act 2013 achieved Royal Assent on 28 February 2013 and its measures started to come into force from 1 October 2013 when councils began to accept applications for new licences. The new Act repealed the Scrap Metal Dealers Act 1964 and Part 1 of the Vehicles (Crime) Act 2001, creating a revised regulatory regime for the scrap metal recycling and vehicle dismantling industries in England and Wales.
The cashless trading measures brought into force via the Legal Aid, Sentencing and Punishment of Offenders Act 2012 are incorporated into the new Act, which also closes off loopholes in the earlier legislation by drawing vehicle dismantlers and former itinerant collectors (now referred to as “mobile collectors”) into the cashless trading regime. Other changes include a new requirement for scrap metal dealers to verify the full names and addresses of sellers. Click on the following links to view the new Scrap Metal Dealers Act and associated explanatory notes.
Click here to download a copy of a special edition of Scrapbook explaining all about the new act.
Click here to view further “Supplementary Guidance” that has been issued by the Home Office clarifying points on the validity and effect of the different types of licence and the application process. The Supplementary Guidance also sets out a flow chart (as previously provided for members in Bulletin 27) to assist in deciding whether vehicles may be bought for cash, outlines the applicability of the measures to businesses in Scotland, and provides slightly expanded advice on verification of supplier. The Local Government Association has also published useful information about the Act (primarily for licensing officers) that can be downloaded here.
Click here to view statutory guidance on determining suitability to hold a scrap metal dealer’s licence.
Most of the new offences came into force on 1 December 2013 to allow some time for issue of licences. However, the offence of buying scrap metal for cash took effect from 1 October, extending the scope of the existing ban introduced last year to include all mobile collectors and motor salvage operators (more below). By April 2014 a substantial proportion of licences had still not been processed despite applications having been made by mid-October 2013.
Not all suppliers will be aware of the changes, and those who themselves do business as scrap metal dealers (including as itinerant/mobile collectors) will need to obtain licences. We therefore produced a poster that can be displayed at the weighbridge to bring the change to their attention, and leaflets to give to customers. We have sent printed copies of the posters to each member, but leaflets will need to be printed locally as required; click here or on the image to the left to download a copy. You can also download the poster in a format suitable for printing yourself by clicking here (a higher-quality version suitable for professional printing may be downloaded here).
Criminal record “Basic Check”
Part of the process to apply for a scrap metal dealer’s licence is to obtain a criminal record “Basic Check” fromDisclosure Scotland; click here to apply on line. Once you have obtained your Basic Check certificate you will need to send it (or a certified copy) to your local council with your licence application. If you have questions about the licensing process you should contact your council’s licensing department; do not expect Disclosure Scotland to be able to do any more than process criminal record disclosure applications. They will not be in a position to answer questions about the licensing process.
You can check the local council for any particular address on-line at https://www.gov.uk/find-your-local-council. The licensing department is likely to be in the district/borough, or city council as appropriate.
From 3 December 2012, changes to the Scrap Metal Dealers Act 1964 made it illegal to buy scrap metal for cash in England and Wales, and that remains in force under the Scrap Metal Dealers Act 2013 (see above). BMRA members can find further information about options for non-cash payment in members’ bulletins and on the members’ area of the web site. If you sell metal to a scrap metal dealer, do not expect to be paid in cash; if the dealer does he will be breaking the law. We have produced a poster that you can download for printing locally by clicking on the image to the right to help get the message across to customers.
The cashless trading provisions introduced into the Scrap Metal Dealers Act 1964 were extended with commencement of the Scrap Metal Dealers Act 2013 to include all scrap metal dealers, including all mobile collectors and motor salvage operators, with effect from 1 October 2013. The exception to the cash payment ban previously available for the limited number of properly registered itinerant collectors who had obtained orders under Section 3(1) of the Scrap Metal Dealers Act 1964 ceased on 1 October 2013. No mobile (formerly “itinerant”) collector may now pay cash for scrap.
Home Office guidance on cashless payments for scrap metal under the Scrap Metal Dealers Act 1964 was issued on 24 October 2012. Whilst the applicability of the ban has extended under the 2013 Act to include all scrap metal dealers, and the record-keeping requirements are considerably more stringent, the details on acceptable methods of payment by cheque and electronic transfer still apply.
We are aware that a number of financial service providers are developing systems intended to satisfy the cashless payment requirement. We are unable to endorse any particular product and recommend that scrap metal dealers satisfy themselves that any payment mechanism they may consider satisfies the terms of the Act and guidance. BMRA members can find further information in members’ bulletins.
Mobile (formerly “itinerant”) scrap metal collectors
Under the Scrap Metal Dealers Act 1964, “itinerant” collectors of scrap metal were required to register with their local council in the same way as all other scrap metal dealers, although some were able to obtain relief from keeping records of purchases and from the cash ban. That has now changed with the commencement of the Scrap Metal Dealers Act 2013. With effect from 1 October 2013 it became illegal for any scrap metal dealer, whether mobile or site-based, to pay cash for scrap metal, and all are now subject to the same record-keeping requirements, including an obligation to take and retain copies of identification documents for people from whom they collect scrap (whether or not they pay). Furthermore, scrap metal dealer collectors’ licences are valid for collection only within the boundaries of the issuing authority (normally a district, borough or city council).
Virtually all metals can be recycled into high quality new metal. The process varies for different metals, but generally produces metals of equivalent quality. Thus, for example:
- Steelmaking using the electric arc furnace process uses scrap metal as the major raw material. This method is typically used for high quality tool steels and stainless steel. Smaller quantities of scrap can also be used in basic oxygen (blast furnace) steelmaking.
- Copper scrap is used by both primary and secondary producers, where processing methods include blast furnace, reverberatory furnace or electric arc furnace. In the latter, around 75-80 per cent raw material is scrap copper.
- Aluminium production uses a single production method – the Hall-Héroult Process. But virgin raw materials require temperatures of around 900 C, whilst scrap aluminium melts at around 660 C.
Metals recycling protects the environment and saves energy. Using secondary raw materials means less use of natural resources which would otherwise be needed to make new metal compounds – such as iron ore in steelmaking; nickel in stainless steel; or alumina and bauxite in aluminium smelting. There are also considerable savings in energy, and reduced CO2 emissions, in production methods using recycled materials:
EU figures indicate that using recycled raw materials, including metals, cuts CO2 emissions by some 200 million tonnes every year.
There are also other environmental benefits, for example, using recycled steel to make new steel enables reductions such as:
- 86% in air pollution
- 40% in water use
- 76% in water pollution
Metals recycling supplies a major worldwide industry. Manufacturing of metals continues to be one of the largest UK manufacturing sectors, employing more people, and contributing more value to the UK economy, than motor and aerospace combined. Growth in China, and to a lesser extent India, means that export markets are growing.
Thus recycled metals have significant economic value – and so scrap metal is rarely discarded or sent to landfill.
In 2005, 13 million tonnes of metal was recycled in the UK. Around 40% of this was used in the UK, and the remaining 60% exported worldwide: the UK produces considerably more scrap than is required for domestic markets.
- ferrous scrap: 4.6 million tonnes of iron and steel and stainless steel scrap was supplied to steelworks in the UK, and 0.9 million tonnes to UK foundries; 6.1 million tonnes was exported. Major markets were Europe, particularly Spain, and Asia, particularly India. The worldwide market for ferrous scrap is predicted to continue its steady growth, which has averaged around 5% per annum over the past 12 years.
- non-ferrous metals: over one million tonnes was processed. Approximately 45% of this was aluminium, 31% copper, and significant quantities of nickel, brass, zinc and lead. Non ferrous metals are traded on the London Metal Exchange, and therefore subject to volatility in commodity investments. UK exports topped 800,000 tonnes in 2005, a 20% increase on the previous year. Europe, China and India are the main destinations.
The UK is one of the five largest metal scrap exporting countries in the world.
Click here for European Ferrous Recovery and Recycling Federation (EFR) statistics on EU scrap steel imports, exports and steelworks consumption in 2010-12.
Metals recycling contributes more than any other sector to UK targets for the prevention of waste through recovery of ‘end of life’ products:
- Packaging: some 2 billion aluminium and steel cans are recycled every year.
- Vehicles: over 75% of a car is metal – nearly 90% of the target. Around half of the material processed by metal recycling shredders comes from vehicles
- WEEE: the industry already recycles most discarded household appliances. Electronic and telecommunications goods are a significant consumer of non ferrous metals.
- Batteries: The EU Directive comes into effect in 2008, but the metals recycling industry is already recycling most lead acid vehicle and industrial batteries.
…and because so much of these products is metal, metal recyclers are also leading the way in research and development to separate and recycle other materials, such as glass and mixed plastics.
Metals recycling is a ‘pyramid’ industry which includes many small, family owned companies, as well as large, international businesses. Operators carry out a range of functions, often including several of the following activities, with smaller operators supplying partially or fully processed metals to larger operators and traders:
- Collection, weighing, sorting and distribution of metals: dealing with a wide range of suppliers, including engineering industries; small traders, such as plumbers or vehicle dismantlers; local authority collection sites; and householders disposing of domestic appliances.
- Shearing – reducing the size of large pieces of metal by cutting
- Baling/compacting – to improve ease of handling and transportation
- Shredding – reducing feedstock to fist-sized lumps; and separating metals from other materials using magnets and air classification methods. A large shredder can process a car in less than ten seconds.
- Media separation – further separation of any remaining non ferrous metals using liquid density and hand or mechanical sorting methods
- International metals trading – moving metals around the world