Inside the World of E-Waste Recycling with Rajesh Gupta, MD of RecycleKaro
Gupta said that recycling is a challenging industry and having technical expertise is a must
With adoption of electric vehicles (EV) growing in India, there is an expected rise in e-waste from EV batteries. And in the largely unorganised market, one player has had a head start.
RecycleKaro, which started in 2010 as a company recycling electronic waste, has also now forayed into battery recycling. The company started recycling lithium ion batteries four months ago, managing director Rajesh Gupta told The Core.
“The commercial plant that we are currently running, it is capable of processing 4200 metric tons of lithium ion batteries,” he said. RecycleKaro extracts lithium, cobalt, manganese from the batteries. Since the company had already developed processes to extract valuable metals from electronic waste, they set up a pilot plant to work on lithium-ion batteries. They ran it for over a year and eventually got good feedback from companies.
After the company signed a joint venture with Tata Chemicals, where they would buy all their metals, they set up a commercial plant.
However, Gupta cautioned that e-recycling is a challenging industry. “If you do recycling, you should be very technically capable of doing that,” he said, adding that if one is not able to recycle over 95% of the product, it is not a viable business.
This week on The Core Report: Weekend Edition, financial journalist Govindraj Ethiraj spoke to Gupta about the technical processes of extracting precious and toxic metals from electronic waste, the logistics behind e-waste collection, the importance of recycling lithium-ion batteries and much more.
Edited excerpts:
Tell me a little bit about recycling and the context in which you set this company up.
Recyclekaro is a 14 year old company. I started this in the year 2010 along with my colleagues. We started, initially, with recycling of electronic waste, where electronic waste is everything that has electrical, electronic components in it. Say it is chips, PCB circuits, wires, cables, plastics, everything.
For instance, if you talk about a tape recorder — it will have speakers, it will have green circuit boards, it will have plastics, it will have some metals in it. What we do, we will first crush this electronics, then take out/separate plastics, metals, magnets, everything will be separated.
These circuits have all major toxic elements. Like it will have mercury, it will have lead. Apart from these toxic elements, it will also have precious metals like gold, silver, platinum, palladium. So it is important that these metals have to be properly extracted using proper technology. Otherwise, just imagine if it is not properly extracted, lead and mercury will mix in the soil. It will create problems for the ecosystem. So at Recyclekaro, what we do is we take out these metals. We have an expertise, technology where we are able to extract these metals properly. We are able to extract precious metals, extract plastics, extract toxic elements and recycle it in a proper way.
And how did you get the idea for doing this business, Rajesh?
From childhood, it was my dream to create something which is good for the environment as well as [something] I can create a good career out of. So this was the basic idea about creating this. This business is where I'm able to contribute towards the environment as well as I have created a good career and I have made it a good business now.
What was the first trigger? As in, at what point did you say that I want to set up a recycling business and not any other business?
I am by qualification an electronics engineer. So I've been in touch with electronics from my college days. That is where every time when I used to see any gadgets, I was curious to open the gadgets and see what actually is inside it. So this became my hobby during my initial days. So I was always very curious to break it and check what was inside it. And then I realised that it has many precious and costly metals like copper, aluminium, and then in the PCB circuit boards it has copper, gold, silver, platinum, palladium.
I thought of doing more, getting deeper into it and extracting everything out of it. And also, as I already mentioned, it has toxic elements in it and I know if it is not properly treated, it's going to create problems for the mother Earth.
Right. In the earlier example, you mentioned tape recorders. Now tape recorders we've not seen, let's say, for 20 years. So what made you think of that example? Is that something that you're still seeing or was it just an illustration?
It was just an example that I have given because a tape recorder is something which almost everyone owned or saw throughout their life. Before it was the Walkman. Now it is a music system or an MP3 player or iPod. So it was just an example even by me.
Got it. Tell us about what comes in and what goes out. So you mentioned using the same tape recorder or MP3 player as an illustration, how are you collecting things and how are you bringing them to you and what is going out from your plant, which I understand you have one near Mumbai.
We have various channels to collect this. Our current plant capacity is that we are able to recycle 7500 metric tons of e-waste per annum, which is close to 700 metric tons per month. And if you break down, it is close to 22 metric tons per day. So this is what the plant capacity is.
We collect lots from IT companies because IT companies generate lots of computers, laptops. So they are our major sources. And apart from that, we also do some collection drives. It is a part of our own CSR where we go educate in the societies and we instruct them. And so these people…the societies, they collect e-waste and then they send it to us, which is a smaller portion. Apart from this IT companies, then government organisations, telephone exchanges, brands like Whirlpool, they give us lots of electronic waste. So these brands also dispose of their electronic waste through us. So this is the way, this is the way the electronic waste is collected by us. And when we process this, we take out copper, aluminium, gold, silver, platinum, palladium.
I would like to mention, four months back, we started recycling lithium ion batteries. We are the only company in India who are able to recycle it and extract it. So, lithium ion batteries, it has cobalt, lithium, manganese, all these metals in it. So we are able to extract all this metal and bring it back into the circular economy. So these are all the metals that come out of electronic waste, and it is sold as a commodity in the market.
In terms of what comes to you, you said you have two or three sources, I'm assuming institutional sources are the largest, including IT companies. So what is the effort that you put in dismantling a certain product and taking out, let's say, the printed circuit board inside? I'm assuming in a computer, it's a large portion of it, so it's easy to access. In another, maybe a television, it's a small part, and you're dealing with many other parts before you actually get to that part.
We have a dedicated logistics team. So once we receive an order, let's say, Infosys is our client…So when they have a requirement, we arrange for the logistics. Our truck goes in and we will collect electronic waste into our facility. So there it is first segregated as per the type. For example, the laptops will be separated. Desktops will be separated. Wires, cables, and other gadgets will be separated. And once we have separated gadgets. So this will, this will be taken for a mechanical process which will shred everything. And once it is shredded, plastic is separated, aluminium or copper or the base metal, steel, everything is separated. And also the green printed circuit boards are separated.
So this green circuit board, it is something where our expertise is to process these green circuit boards. So this is the most critical part of the electronic waste. Otherwise everything is just base metal or plastics.
Can I ask you to break down a unit cost? Let's say what is the cost of acquiring some of this? I'm assuming there is a cost, I mean apart from the logistics cost. And then what does it cost you to reach the point where you're actually working and extracting from that printed circuit board, which I'm assuming is the last point. And then what is your selling cost or the cost at which you're able to actually sell whatever you've extracted?
Every electronic waste has different economics linked to it. So let's take for example, a computer. So if in a computer, you have a major steel in it. So you say 70% is amount of steel in it. 10% is a printed circuit board, 10% is wires, cables and everything. And 10% is miscellaneous. Miscellaneous which also includes plastics and all. So this is how major electronic waste,
And what do you do with the steel?
Steel is sent to the steel furnace where they process or make steel ingots or products.
But that the dismantling is done by you and then you send that steel onwards to, let's say someone who works on steel, as opposed to you obviously in the electronics of it.
Correct. So, for us, what we process ourselves in house, we, of course, we dismantle everything but circuit boards - green PCB boards are something which we have a capability to process and take out all the metals out of it.
If you were to, let's say, take a computer, and you mentioned desktops, I'm assuming because these are older and that's why they're coming to you today from Bangalore.. So what's the cost and per unit economics the way it works? Let's say one desktop that leaves the Electronic City in Bangalore, travels to Navi Mumbai, gets opened up, and then starts getting processed. Until that point, what's the unit cost and unit economics like?
It always depends on the brand the product is made out of. So it is not fixed. For example, the Apple desktop will have a different proposition of material. Samsung will have a different, LG will have different. HP will have a different nature, and ACER will have a different proposition.
If you ask me about our business, we do 10% PAT. So after transporting, dismantling, extracting all the metals…our business model is where we make 10% profit after tax. So while calculating, we calculate in a way, after taking out precious metals or the extraction cost, refining cost, dismantling cost—-so after all the cost is considered, we ensure that we should have at least 10% PAT , which has to be with us to run our business. So this is how we calculate.
We have a database of all the brands...we have an R&D facility and a laboratory where…for example if we receive an iPad 2. So I have a post mortem and all the material balance of iPad 2. So whenever I have a requirement for iPad2, I will just go refer to my database, and then accordingly, I will take out today's commodity prices, and then I will fix the price, and then I will quote and I will buy the material. So this is how it works.
What's the hierarchy? Who, which model or brand is placed at the highest in terms of your ability to extract value?
For us Apple is the best product because Apple uses lots of gold in it. Our entire business model is dependent on the percentage of gold present in an electronic gadget. So that is a very important metal for us. So we are always looking for Apple products.
That's interesting. And how much of your business would be linked to Apple or at this point?
It always depends. But 20% of our business comes from recycling laptops and desktops, which will also include Apple, HP, Acer, everything.
Now if I can spend a minute or two on the output. So once this stuff has gone into your machines, and I'm going to ask you a little about that as well in a moment. What is it that comes out and in what form and how are you sending it out to and to whom?
Gold will usually come in the form of ingots. And other metals like copper…It always depends on the buyer. So when we do a chemical treatment or a hydrometallurgy process, where these metals, all the mixed metals are first leached in an acid and then using different refining processes…for example, we use the solvent extraction process. Everything is then refined in a solution.
Some buyers prefer to buy salt. If I'm extracting it using sulfuric acid, I can also get salt in the form of gold sulfate or cobalt sulfate. This is the form of the metal that is extracted. Now again, I have a capacity of converting these sulfates into metals. So this depends on the buyer. Today we sell our cobalt as sulfate. We sell our lithium as carbonate. We sell our gold as metal. We sell our copper as metal. So this is how we sell.
Of the 7000 tons that you do roughly in a year, what's the value hierarchy? I mean, which is the most, let's say you said gold, which I'm assuming is the most precious, what comes next?
If you ask me about the percentage proposition, what is the largest metal that we get…copper comes number one. Then comes gold, silver, platinum, palladium. So cost wise, if you ask me, after gold comes platinum, then also there is some palladium that we extract. Then comes silver, then comes tin, then comes, then comes all the metals like nickel, copper, everything.
And the machines that you use for this are these, have you manufactured them yourselves? Or are these available across the world on a certain scale?
What happens is hydrometallurgy is, there is no fixed machine in it. So you need to have reactors. So reactors you can fabricate it yourself or buy from somewhere. So there is no standard equipment.
And why is it that there is no standard equipment? I mean, is it because the market is still very young…
No, not like that. There are some people. So here technology is the major part. For example, to make it very simple, what we have in our factory, it's a kitchen. So to prepare any, say, if you want to prepare biryani, what will you need? You will need a gas stove, you will need utensils, you will need a stirrer. So this is how the factory is made. We have reactors, we have refining equipment. It's all a combination of various equipment that we have in our factory. Some we procured in-house, some we procured locally in India, some we imported from other countries, some we fabricated it ourselves. So it is a combination of everything.
If you are at 7000 who would be the world's largest? Or let's say, what is the scale in this world? Where does it sit at?
If we talk about refining of metals from electronic waste, Umicore - it's a Belgium based company. Which is the largest today. We want to become something like them.
Its main headquarters and main refining, and everything is done at Belgium itself. Umicore is listed and they are doing quite well. And the recovery, the technology, it's super fine. I mean, they are the best and leaders in the world now at present.
But would their process, and I'm saying any large, let's say the largest companies in recycling, are their processes or plants similar to yours? I mean, because you use the kitchen example. So I can imagine, let's say large vats where things are boiling, things are being dipped and pulled out and, you know, and then you're extracting. So is it a similar process or would it be more, let's say, assembly line kind of process?
No, this is the same because when you want to extract metals. So hydrometallurgy is something which is basically a chemistry, you know, which is taught to everyone in the schools and college, it is same, but the technique that you use, the more you are more efficient, and the refining technique that you are using, it has to be more efficient, and the purity of the end product has to be good.
The key here is the technology and the process which you follow while extracting these metals. The process is the same, but efficiency, the way you do, how efficient you are and how…. What purity of the metal you are able to extract. So that is the key. So, I think we should be at the par with other international players, but we are a learning company. We are always constantly evolving and adding to our technology, refining our processes, and we are still learning.
How much of your stuff that's coming into your factory for recycling, how much is institutional and how much is, let's say, retail, for lack of any other word.
Retail as of now is very less. But we plan to build a mechanism, a back end, and proper logistics channels where we will be able to collect from households. So that is our long term plan which we will be starting soon.But as of now, more than 95% comes from institutes.
Four months back, we started recycling lithium ion batteries. So we are the only company in India who are able to recycle it and extract it. So, lithium ion batteries, it has cobalt, lithium, manganese, all these metals in it. So we are able to extract all this metal and bring it back into the circular economy.
We started because we were already expecting metals from e-waste. And we saw opportunities where EVs were…I'm talking about 2017-18, when we were initially doing R&D and studying lithium ion batteries. So we realised that it had metals like cobalt, lithium, manganese, nickel. All these are very critical metals. And India, we don't have a source for this. We don't have any reserves for all these metals.
This made us realise why not to do something about it and why not to extract? Because we already the basic technology, we had hydrometallurgy technology, and we had a lab and everything. So we thought of doing something where we are able to extract all these metals.
And we started doing R&D. And once we were able to extract on a lab level, then we went ahead and we set up a pilot plant. The pilot plant we ran for almost more than a year. And once we were confident that we are able to make a good quality product and companies like Tata Chemicals, they did a JV with us and started buying all our products. Whatever we used to produce, they used to pay us in advance and buy all our metals. So we became confident, and then we went ahead and we built a commercial plant. So the commercial plant that we are currently running, it is capable of processing 4200 metric tons of lithium ion batteries. We extract lithium, cobalt, manganese, all these metals in our factory.
And what's the pathway for this? For example, let's say again, you know, if I had a two wheeler and I brought a battery to you and say my, this battery has no life left. It's not. I mean, it's lost its charge capacity, which is why I'm assuming it will come to you for recycling. And what happens after that?
Once the batteries are received, once the batteries are end of the life, or factory rejects, they come to us. We will discharge the batteries. Otherwise, if we crush, it may explode.
So we discharge, and then again, we have a mechanical process. The entire battery is shredded. And once it is shredded, what we do mechanically, we separate copper foils, aluminium foils, plastics, and some steel in it. And then what remains is the black mass, the black powder, which has all this cobalt, lithium, nickel, manganese, everything in it. Processing this black mass is critical which is what we are experts in doing.
This black mass is taken to reactors. We have ten reactors in our factory, which has a capacity of 35,000 litres. So we have a total, say, three lakh litres of leaching capacity in our factory. All this black mass is put in the reactors, and using chemicals and acids, it is leached. And then we have a series of processes where these metals are extracted, then refined, purified, and at the end, we get a pure form of metals. Which is more than 99% pure. So whatever we extract, say, lithium or cobalt, it is more than 99% pure. And the best part of our factory is its zero disposal facility, ZDL. So there is no liquid and solid waste generated in our factory.
In your factory, the part that we spoke of earlier, which is the electronic waste, and then this part, which is lithium ion, how is it split? I mean, are these two ends of the same factory premises, or is it two different units?
We have a big land parcel of 17 acres out of which we have designated one portion of land, which is 5.5 acres, for electronic waste. And in the same premises we have.
And that was your first, and that is what you started with?
No, we started with our very small plant. This one is upgraded. So 5.5 acres is allotted for e-waste. And in the same premises, 4.5 acres is allotted for lithium ion batteries.
Now, the lithium ion…who is the buyer for that?
What comes out of lithium ion batteries is cobalt, lithium, manganese, nickel. Cobalt comes in the form of sulphate; nickel in the form of sulphate; manganese also sulphate; only lithium comes in the form of carbonate, lithium carbonate. So this, the battery manufacturers, they buy from us. It again goes into manufacturing of lithium ion batteries, new lithium ion batteries.
But apart from that, cobalt has other applications as well. Some companies buy our cobalt to use in pigments, paint and pigment industries. And some they buy for veterinary products. So because this cattle feed, it has a lot of cobalt used in it.
Lithium has a secondary application where lithium goes into catalysts and also it goes into lubricants, high value grease, and lubricants. It has lots of lithium in it. And also glass industries, they use lithium. So there are various applications, but major applications, if you ask me, go into making new lithium ion batteries.
For someone who's making a new lithium ion battery, what proportion of their materials… I am again using a two wheeler, like a two wheeler e-bike as an example, what proportion of that, their raw materials would be recycled today?
Recycled material can also be made very, very pure, but there is a cost to it. So the best thing that is normally done is 70% of virgin material is mixed with 30% of recycled material…to make a new battery, also extracting metals from recycled waste source, it is considered best in the world because the cost of extraction and the cost of the environmental…for example, if you mine cobalt, it has lots of environmental problems.
When you mine it, you use lots of water, you use lots of labour. So it is, it is very dangerous or it is not recommended. So you should always use recycled products. This is why in India as well as in Europe, there's a new rule called batteries management rule, which says at least 30% of the recycled product should be used in manufacturing of new batteries or any gadgets.
That's a policy help for you, which, which I'm sure you need, because I can sense that the cost of recycling, obviously today, is not necessarily conducive to, let's say, creating a completely new battery in this case. So if you were to, let's say, look at it a little ahead, given the cost that's involved. I mean, there's energy cost, there's raw materials and chemicals that you're using to process, and there's the effort that you put in. There's logistics. If you take away some amount of the subsidy element, which, let's say, companies, I mean, wherever it's coming from, how feasible is this as a business if it were to stand on its own?
It's a challenging industry. As I already mentioned, if you do recycling, you should be very technically capable of doing that because if you're not able to recycle it at a good efficiency level, what would we say in our industry…Anything below 95%, it's, it is not workable. So it has to be more than 95%.
And also the purity of the metals that you extract, it has to be more than 99%. If you are not able to do that, it's very, very difficult to survive in this industry. So to make it a win win, you need to be more efficient. You need to process lots of volumes. If you're not able to process a big volume, you will not make it an industry or a profitable business. So you need to process it in a bulk quantity. And the purity of the metals that you extract, it has to be more than 99%.
I think these three three important parameters to run make it a successful business.
When you bid against other players, as, let's say, when, again, you're back at either Infosys or some other IT company or anyone who uses a lot of computers or has been using. How many people are you usually bidding against…in, at least in numbers.
I think in India there are, when you talk about e-waste, I think five or six players, major players who are able to compete with us.
And do you see that number going up?
Of course. And it is also required, you know, because the amount of electronic waste which is getting generated in our country, it's so huge and out of it, a very small portion is getting recycled. So, it is required that more companies like Recyclekaro, with good technology, good efficiency, have to come into the play and start recycling more and more.
Otherwise electronic waste will be a problem— because we are now as a country, we are going digital in a big way. So the amount of data being processed and used, it's huge. The amount of electronic waste which is going to generate, it's also going to be huge. I feel there will be more companies like Recyclekaro required to fulfil this requirement. And also for us, we should also be expanding ourselves every year to cater to such a huge need of the country.
Between institutional and non-institutional, what's the size of the market today, as in what percentage of institutional waste are recyclers picking up today versus retail?
Retail has to be picked up, which is not happening because the cost of collections and logistics is very high. Now what has happened is the government has brought in EPR (extended producers responsibility) for recyclers. So we are being paid by brands to fulfil their EPR. Since we have been paid, we have a room to spend more on logistics and buy from retail clients or retail. Suppose if you are a household and if you want to dispose of it before it was very costly. So now EPR revenue will help us in buying from residential clients as well. So I see this as a major step.
Soon you will see lots of recyclers spending money and buying from or collecting from the residential clients. So this is a possibility now.
And would you say all the major brands, I mean, earlier, for example, you mentioned Samsung, LG, Apple. Are all these brands now spending in recovering as well in India?
They have to because the government has put in EPR targets for them. For example, let's say Samsung, if they produce 100 metric tons of electronics, they should ensure a certain portion which has to be recycled. And we as recyclers should provide them with their EPR certificate saying we have recycled on behalf of them. So these EPR credits are traded now. So we will sell our EPR credit points to these brands to fulfil their compliances.
Is the major market for yourself or do you feel that there is opportunity elsewhere too? I mean, it could be a smaller country, but maybe more e-waste being generated, logistics may be more simple.
As a company, we have spent 14 years now in this industry, and most of our time goes into refining or making or building a process. So as I already mentioned, we have a very good R&D facility as well, where we have a database of close to 10,000 different types of gadgets. Ss a business now, we are matured. We have a process. And now we are ready to go into various other geographies as well. Because we will have to just replicate our model in other geographies as well. So these are in our plans. And soon you will see Recyclekaro going into various other geographies and setting up businesses in other countries as well.
