Major Mining Companies Venturing into Recycling Amid Growing Demand

Rio Tinto's Strategic Move into Aluminum Recycling

Rio Tinto Ltd.'s $700-million investment for a 50% stake in Brampton, Ontario-based Matalco Inc., an aluminum recycler, marks a strategic shift for the mining giant. Though a small fraction of Rio's annual income, this investment fills a critical gap in its aluminum business. CEO Jakob Stausholm views this move into recycling as crucial for future growth, especially as demand for metals like aluminum, lithium, and copper rises with the global shift to green energy.

Increasing Demand for Recycled Metals

According to the International Energy Agency (IEA), recycled metals are expected to contribute significantly to the total supply post-2030 and become much more significant by 2040. Rio Tinto anticipates a 70% increase in the demand for recycled aluminum in the U.S. by 2032, driven by sectors like transportation, construction, and packaging. Recycling also helps reduce the carbon footprint of aluminum production.

Glencore's Longstanding Presence in Recycling

Glencore PLC, another major player, has been in the recycling business for decades, recovering significant amounts of copper, gold, silver, nickel, and cobalt in 2022. Its recycling division contributes significantly to its earnings, a figure expected to rise to about $1 billion by the end of the decade due to increasing battery waste.

Different Models for Recycling Operations

Glencore's recycling operations focus on metallurgical transformation, with partnerships covering other aspects like scrap collection. This model contrasts with Rio's approach, where Matalco will continue operating the joint venture's recycling facilities while Rio markets the products.

Barrick Gold's Focus on New Projects

While Rio Tinto and Glencore expand into recycling, Barrick Gold Corp., a major gold and copper producer, is not planning to enter the recycling sector soon. CEO Mark Bristow emphasizes developing new copper projects, citing soft commodity prices and a market that hasn't yet recognized copper's shortage.

Future of Battery Recycling

The lithium-ion battery recycling industry is expected to thrive in the coming decade. According to Kunal Sinha of Glencore, the current focus is on manufacturing scrap from battery plants, with the 2030s poised to be crucial for scrap from end-of-life electric vehicle batteries.

Implications for the Mining and Recycling Industries

The involvement of major mining companies in recycling signifies a significant shift towards sustainable practices in the industry. As the global economy transitions to green energy, the demand for recycled metals is set to increase, offering both environmental benefits and new business opportunities for these companies. The diverse approaches to recycling by these giants indicate varied strategies to capitalize on this burgeoning sector.