Alcoa Buys $10m Stake in E-Waste Firm ERI

Aluminum heavyweight Alcoa is investing $10 million in Electronic Recyclers International (ERI), one of the nation’s biggest collectors of e-waste.

The two companies announced today that Alcoa will invest the money for a 10 percent equity share in ERI, which puts the recycler’s valuation at $100 million. Alcoa said it will promote e-recycling among its business partners, and will provide advice and counsel to the ERI board.

Alcoa said it is making the investment because of a sense of responsibility over how its products are disposed of, and because it projects a big increase in the aluminum content of electronics. The company said it expects that over the next three years, the amount of aluminum used in laptops will grow by 30 percent.

“We see that consumer electronics are aluminizing,” Alcoa chief sustainability officer Kevin Anton said. “You look at the Apple product line, for example, and across the board more and more aluminum is working its way into consumer electronics.”

Aluminum content is rising in laptops, cell phones, TVs, e-readers and tablets, Anton said. “It’s got a great look, it’s got a great feel. It provides protection and resistance… If you think about aluminum, it’s so good at conducting heat away, so you can design electronics that don’t need fans.”

At the same time, Anton said, the lifespans of electronics goods are getting shorter, so more products need to be recycled or reclaimed. “Unfortunately more and more are ending up in landfills. We see aluminum as the sustainable answer for consumer electronics.”

And he said that with ERI accounting for about a fifth of electronics recycling, the two companies have a natural fit. Alcoa has been involved in aluminum recycling since the 1960s, when it started collection centers and transport services to buy old cans from civic organizations. Today about a sixth of Alcoa’s aluminum output has recycled content, Anton said. This includes a 20 percent recycled line of aluminum sheeting, which is used for consumer electronics.

Alcoa will look to buy some of ERI’s scrap metal, Anton said. But a large part of aluminum recycling’s effectiveness depends on scrap being sold and used regionally, so Alcoa won’t be able to take all of ERI’s metal. “We will work with the ERI guys to make sure aluminum ends up in the best possible home… That doesn’t necessarily mean Alcoa,” Anton said.

“The access to aluminum from recycling itself is quite frankly a tangential benefit,” he added. “The real benefit is responsible stewardship. If we’re going to make a product and sell a product, we can’t let it end up in landfills. We can’t let it end up in third world countries being dismantled by children.”

In 2009, Alcoa purchased and recycled 553,000 tons of aluminum scrap. The company operates one of the largest used beverage can recycling facilities, which was recently upgraded to increase its recycling capacity by 50 percent.

Alcoa and the Aluminum Association have set a goal to increase the recycling rate of aluminum cans in the U.S. to 75 percent by the year 2015.

This goal, if met, would save the industry the electricity equivalent of two average-size coal-fired power plants and prevent nearly 12 million metric tons of carbon dioxide emissions a year, the company said.