Your trash bin scavengers are not the grubby dregs of the society you think they are. They are digging gold if you care to know, SIAKA MOMOH reports. This Throwback piece (abridged) from Archives-Siaka Momoh was first published in 2013. Exchange rate used here was the rate reigning when the story was published.
If you think those mucky men you see in your neighbourhood daily, rummaging your dustbin for items of interest are the dregs of the society, you are mistaken. These supposedly dregs of the society may not mean anything to you, but they mean a lot to the economy. Those items they sift from your trash bin are gold to them and companies that are involved in trash recycling.
The items in question are disused plastics, iron and steel scraps as well as aluminium scraps. Across metropolitan Lagos, you find centres where these scraps are sold to collectors who in turn sell them to recycling companies. Lagos-Badagry motorway, Festac area, has such centres. Scrap sales centres are also found in towns across the country.
A kilogramme (kg) of aluminium sells for between N130 and N150, copper N700, and steel, N20. There is huge potential for this business going by Nigeria’s per capital consumption for steel and aluminium. One is discounting plastic wastes here, an item that is found in large quantity in the country. The annual per capita consumption of steel and aluminum in the country is about 10kg and 0.3kg respectively. Corresponding world average in respect of both metals is 130kg and 5 kg respectively. So there is huge gap to fill.
The federal government’s metal policy is geared towards the need to develop a vibrant metal sector where government will play the role of sole administrator and regulator, the private sector as owner-operator with a view to enabling the country become a major regional and world producer of aluminum and steel products. It is envisaged that this will lead to a production target of 500,000 tons of primary aluminum and 12 million tons of steel products by the year 2020.
Total installed capacity for coil aluminium production in the country currently is 80,000 metric tonnes but total demand is 150,000 metric tonnes. Actual production is 29,000 metric tonnes. Industry players argue if the business environment is right, more mills will come up and Nigeria can do 200,000 metric tonnes and more and export thereafter. And according to Foraminifera Market Research findings, it is estimated that 200,000 metric tonnes of steel product is consumed in Nigeria annually “and since most of the country’s steel is derives from recycled material, there is constant demand for steel products”.
Local rolling mills and contending forces
Four frontline aluminium rolling mills in Nigeria are facing challenges and have cried out to government. The four include Tower Aluminium Plc, First Aluminium Plc, Qualitec Aluminium Industries Limited and Aloy Aluminium Limited. They are faced the problem of competing with unchecked importation of cheap aluminium raw materials from Asia and South Africa; and export of scrap aluminium which they need for recycling in their plants is an additional problem for them. Jinesh Dugad, group managing director of Tower Aluminium for instance said, “We need 2000 metric tonnes of scrap iron for our operation per annum but get only 1000 metric tonnes”. Others complain of dearth of scrap aluminium too.
Export of scrap metal is on the Federal Government Export Prohibition list but it is being smuggled out of the country with impunity. Only recently, 17 Indians and their collaborators were apprehended by the Nigeria Customs Service (NCS) for their alleged involvement in the attempted illegal export of four container loads of aluminium scrap valued at over US$ 470 000. The arrest of the Indians came on the heels of an earlier detention of a Chinese and a Nigerian trader for their bid to export a container-load of scrap metal through one of the seaports in Lagos. The four containers in question were intercepted while they were being conveyed into the port. Tower aluminium has an 80/20 percent mix for scrap aluminium and imported coils/ingots.
Bigger business
A level of scrap scavengers has a big business opportunity in scavenging abandoned or disused second hand cars. Most Nigerians still opt for used cars. This is dictated by Nigerians’ level of income. Per capita income is about $1600.
According to C.O.A Agbo of the Department of Mechanical Engineering, University of Nigeria, Nsukka, in a paper titled ‘Recycle materials potential of imported used vehicles in Nigeria’, about 50,000 vehicles valued above $2,000 each were exported to Nigeria from the U.S. in 2008, based on various social sources compiled by Export Trader. And according to the Director General, National Automotive Council (NAC), Aminu Jalal, vehicles imported annually into the country are worth N487 billion. Jalal explained that a total of 80,000 new and 200,000 used vehicles were imported into Nigeria in 2008 alone.
“Nigerians mainly import low-end, eight-to-ten-year-old vehicles valued below $5,000; flooded, damaged and stolen cars – ten-year-old, are imported” said VadymKozub, director of development for Export Trader. All sorts of abandoned, discarded, wrecked, ruined, or worn out vehicles that cannot be repaired and put back into service otherwise called ‘end-of-life vehicles’ (ELV) are found in Nigeria, said Agbo. “They have value as a source of used parts, scrap material and other material for recycling and repair work. Motor vehicles are the number one recycled consumer product in the United States,” he added.
He explained, “Nearly 90 percent of automotive aluminium is recovered and re-cycled. Although this aluminium represents less than 10 percent of the average motor vehicle by weight, it accounts for roughly half of the vehicles value as scrap. Auto recyclers supply more than one-third of all ferrous scrap (iron and steel) to the U. S. scrap processing industry. When manufacturers use scrap iron and steel instead of virgin ore, they reduce air and water pollution by more than half during the manufacturing process.”
It is therefore bigger business venture going for disused vehicles – cars, buses, trucks and even aircrafts and ships. For instance, reports have it that Aayu Steel Mills may realize over N480 million from the ongoing dismantling of over 60 disused aircraft in the nation’s airports. The company is engaged by the Federal Airports Authority of Nigeria (FAAN) to clear disused aircrafts from airports in the country. The aircrafts whose purchase price was valued at $2.4 billion (N379 billion) were given a scrap value of N800, 000 each. After dismantling of the abandoned aircrafts, according to Basiru Haruna, logistics officer of Aayu Steel Mills, the parts would be taken to our mills for recycling into aluminium for inward use…
