INDIA: INCLUDING THE EXISTING INFORMAL SECTOR IN A CLEAN E-WASTE CHANNEL

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1 Proceedings of the 19 th Waste Management Conference of the IWMSA (WasteCon2008) th October Durban, South Africa. ISBN Number: INDIA: INCLUDING THE EXISTING INFORMAL SECTOR IN A CLEAN E-WASTE CHANNEL ROCHAT D*, RODRIGUES W**, GANTENBEIN A* * Swiss Institute for Materials Science & Technology (Empa), St.Gallen, Switzerland, Tel: , david.rochat@empa.ch ** Saahas, Bangalore, India ABSTRACT Waste electrical and electronic equipment (WEEE) or e-waste is increasingly generated and processed in India. The waste originates from both national consumption ( t) and waste imports ( t). In India the e-waste processing and recycling is managed almost entirely (95%) by informal recycling businesses. Due to the application of inappropriate techniques, this sector bares high risks of environmental and occupational hazards and also looses valuable materials. Formal recycling industries have to compete with the informal businesses and simultaneously comply with environmental and occupational regulations. In Bangalore, the IT hub of India, the three newly-born formal recycling industries compete with scrap dealers for the big lots of e-waste from large companies, which result in material flowing into the uncontrolled informal sector. Promoting e-waste disposal policies in companies reduces the amount of e-waste flowing into the informal sector and creates incentives for formalization. The formalization of the informal sector into a transparent recycling system is crucial for a better control on environmental and human health impacts. In the same time, it bears the advantage to profit from their network, allowing for a better collection system, and preserves the employment generated in the poorest strata of the population. This paper demonstrates a case study of assistance for the authorisation process with an association of informal dismantlers. Alternate business models guiding the association towards authorisation have been developed, where a city wide collection system feeding the manual dismantling facility and an export strategy towards best available technology facilities to yield higher revenue from printed circuit boards are promoted. By replacing the traditional wet chemical leaching process for the recovery of gold with the export towards integrated smelters and refineries, safer practice and higher revenue per unit of e-waste collected are generated. Further assistance for establishing collection system and for complying with legal requirement will be necessary, as well as monitoring of the recycling processes to ensure their reputation after being authorised.

2 KEYWORDS Informal sector, e-waste, Recycling, India, Material Recovery. INTRODUCTION According to the latest assessments (MAIT 2007), e-waste is increasingly generated and processed in India. The waste originates from both national consumption ( t) and waste imports ( t). E-waste recycling is economically motivated by its content in base, precious and special metals, while it carries an environmental burden due to its load in substances of concern (Hagelüken 2006a). In India, where no specific law regulates e-waste recycling yet, the existing system has developed organically from the pre-existent scrap industry traditionally dealing with scrap from ship breaking, end-of-life vehicles or demolition waste (Sinha-Khetriwal et al. 2005), resulting in the specialization of a so-called informal e-waste recycling sector. Because of a lack of control and regulation of the recycling industry, the poorest strata of the population find an economic benefit in recovering the valuable parts of e-waste with nonscientific methods while simply dumping the non profitable and often hazardous fractions. Moreover, toxic chemicals are used to recover valuable metals like gold, silver or copper from the printed wiring boards, causing a direct impact to the workers health and to the environment (e-waste guide 2008; Greenpeace 2005; Agarwal et al. 2003, Sepulveda et al 2008). Many efforts have been invested in the past years for implementing "Clean e-waste Channels" in India (e-waste guide, 2008), where only formal recyclers authorized under Indian legislation provide a collection service to e-waste generators. In order to implement this Clean e-waste Channel, it is necessary, on the one hand, that consumers of electric and electronic equipments gain awareness and hand over obsolete equipments only to authorized recyclers. On the other hand, the newly born formal recycling sector needs to be strengthened and incentives need to be created for informal groups to join in. Such incentives result from research that has shown that beside being hazardous, the wet chemical leaching processes for the recovery of precious metals are also inefficient (Keller, 2006). During the leaching process, about 20 % of the gold contained in printed wiring boards (PWBs) is recovered, while integrated smelters and precious metal refineries recover at least 95 % of 17 different metals (Hagelüken, 2006b). Based on these results, "alternate business models" for the informal sector were developed (Rochat, 2007), where wet chemical processes are abandoned against international trade with state-of-the-art industries. This means that the workers from the informal sector have to change their habits, and instead of collecting e-waste and conditioning it for the recovery of gold only, they need to prepare the optimal fractions for shipping them to an integrated smelter. This paper shows that for different qualities of PWBs, a special conditioning of the material needs to be made in order to ensure the financial viability of the alternate business model, and to make it more attractive to the informal workers than the usual baseline scenario they practice. As integrated smelters and precious metal refineries don't exist for the moment in India, the alternate business model considers shipping the material to the Umicore Precious Metals Refinery () in Antwerp, Belgium.

3 3 CATEGORIES OF PWBS Three categories of PWBs are distinguished for practical experimental reasons, and are defined by their content in the metals paid and billed by to their customers. Each category corresponds to boards found in different types of appliances, and are characterised by their content in gold. The concentration of other metals are defined as ratios to gold (X : Au), which are 1:10 for silver, 2,5:1 for palladium. It is considered that all boards contain an average of 15 % copper and of 1 % cadmium. Cadmium is essentially found in nickel-cadmium batteries, and is labelled as a "penalty" material because will bill the customer for disposing of it properly. Table 1: arbitrary categories of printed wiring boards defined on their metal content Categories Gold Silver Palladium Platinum Copper Penalty Low Medium High % 1 % Cd % 1 % Cd % 1 % Cd % 1 % Cd % 1 % Cd Low- boards ( gold) typically comprise printed circuit boards from monitors, radios, video recorders, music appliances, electronic clocks, etc. Such boards are easily recognised, as the epoxy part is of bad quality, of brown colour and can be broken by hand. More recent boards made of green coloured epoxy are labelled as low- when chips or connectors cannot be identified. Medium- boards ( gold) come from servers, computers and laptops. The epoxy part is typically green coloured and several apparent gold-plated parts are visible, such as connectors, as well as small chips. In general, the older the material the higher the gold content, as the concentration of precious metals tends to decrease with modernisation of computer boards. Finally, high- boards (> 200 gold) come mainly from mobile phones or from segregated parts from computer boards such as chips and connectors. BASELINE SCENARIO VS. ALTERNATE BUSINESS MODEL The two scenarios studied in this paper are defined in the following figure. The studied material is printed wiring boards (PWBs), as this fraction of e-waste is the one that both drives recycling economically and causes the highest environmental concern.

4 Baseline scenario: wet chemical leaching collection Dismantling/ segregation Metal recovery Alternate business model: integrated smelting and refining Limits of the studied system Figure 1: scope of the study and system limits In the baseline scenario, the recyclers collect and dismantle the boards in order to segregate the apparent gold containing parts, such as pins, connectors or chips. The rest is either thrown away, or sold to vendors on the local market for the extraction of the remaining copper. The wet chemical process for gold extraction is described in detail in (Keller, 2006). In the alternate business model, the recyclers collect and segregate the boards in order to accumulate them until they obtain the minimal required amount to be shipped to an integrated smelter and precious metal refinery abroad. For both scenarios, metal prices are indexed on an average value of the past 52 weeks of the London Metal Exchange. For the alternate business model, the shipping cost from India to Belgium is about 180'000 Indian Rupees (INR), or 4'290 US$, for a container of 10 tons from Chennai to Antwerp. For a lot of e-waste arriving to, the content in gold, silver, platinum, palladium, copper and cadmium is analysed and fixes the gross value. then deducts its service charges, which can be separated between fixed and variable charges. The fixed charges are defined for a lot, usually 10 tons, independently of its quality, and cover treatment, shredding and sampling costs. The variable charges comprise the refining costs of precious metals and disposal costs of penalty metals like cadmium or beryllium. They depend of the quality of the material and are negotiated with each customer. Usually, the shipment from India to Belgium takes about 2 months, and the sampling and processing of the material in takes another 3 months, so that the customer is only paid for his e-waste after a 5 months period. The table bellow provides the results for a 10 ton lot shipped to from India, for different s of boards characterised by their content in gold. Column 2 indicates the gross value of the lot, which is simply the amount of metals contained in the lot multiplied by 99 1 % of the current market price. Columns 3 and 4 indicate the deductions in currency and in percentage, while columns 5 and 6 show the respective shares of the fixed and variable charges. Finally, column 7 shows the net value a customer is paid at 's door, and column 8 show what an Indian recycler would be paid once transport costs and taxes are deducted. In comparison, column 9 shows the net profit made by an Indian recycler for the same lot, according to the baseline scenario. 1 The gross value is multiplied by a security coefficient of 99 %

5 Table 2: Gross and net values of a 10 ton lot shipped to from India. The net profit is compared with the baseline scenario, values are in (US$/ton). Category Gold Gross Deductions Deduction -% variable cost-% fix cost- % Net Net Profit Alternate Business Model Net Profit Baseline Scenario Column number Low Medium High % 36.97% 63.03% % 38.33% 61.67% % 40.24% 58.76% % 42.60% 57.40% % 45.02% 54.98% % 47.24% 52.76% Table 2 clearly shows that for medium and high materials, it is more profitable for an Indian recycler to ship a lot directly to without any further conditioning. According to specialists (Hagelüken, 2006), any manipulation of medium and high boards induces a risk of losing up to 20 % of precious metals in shredding and breaking processes. On the contrary, very low boards are more profitable to be sold locally according to the baseline scenario. As the objective of the alternate business model is to abandon wet chemical leaching in India, because of its inefficiency and high environmental impact, by promoting international trade with state-of-the-art refineries, only part of the problem is solved and a solution needs to be found for low material. Moreover, as described above, low- boards are found in most household appliances, which have a much greater penetration rate in India the IT equipments, and constitute a very large share of all boards contained in e-waste. Therefore, a conditioning of such boards is required, and the following chapter shows how low boards can be "upd" until it is economically profitable to apply the alternate business model. UPGRADING LOW-GRADE MATERIAL Low boards usually contain very little precious metals, and the profit made by recycling them in the baseline scenario is rather motivated by heavy parts made of steel, aluminium (cooling devices) and copper (coils, power supply). These fractions can be sold to state-of-theart facilities in India, where they will be handled properly. Therefore, removing them from the low- boards will allow segregating pure fractions of steel, aluminium and copper, while concentrating the precious metals on the remaining board. An experiment was conducted with a group of informal recyclers in Bangalore, India, with a lot of 21.7 kg of low- boards provided by the dismantling of video recorders, monitors and music equipments. Such material typically contains approximately 30 gold and is considered as very low-. According to the baseline scenario, this lot of 21.7 kg would induce expenses for 550 INR / 13.1 US$ (buying + labour costs) and generate an income of 726 INR / 17.3 US$, thus a profit of 176 INR / 4.2 US$. The figures in table 3 show how this benefit can be significantly increased by "upgrading" the boards by removing the heavy parts.

6 Table 3: increased profit due to the dismantling of low- boards into several pure fractions Material Weight Recycled in India? Expenses Income Benefit Low Material 21.7 kg INR 1036 INR 290 INR Low Boards 5.8 kg No, ship to 174 INR Cable and LOTs 5.0 kg Yes 200 INR Iron 2.3 kg Yes 30 INR Plastic 0.3 kg Yes 6 INR Copper coils 2.3 kg Yes 200 INR Aluminium 1.9 kg Yes 190 INR Condensators 0.5 kg Yes 40 INR Screws 0.12 kg Yes negligible Non "upable" boards 3.5 kg No, ship to 196 INR Labour cost Shipping cost 66 INR 130 INR The lot is dismantled into the fractions described in the table for an additional 66 INR / 1.6 US$. The different fractions such as iron, copper and aluminium are sold locally at the market price, while the boards are upd from an initial 30 gold concentration to gold. Taking into account the shipping costs, the total income generated by the different fractions sold locally and the boards sent to sums up to 1'036 INR / 24.7 US$, thus creating a profit of 290 INR / 6.9 US$, almost the double of the income generated by the baseline scenario. CONCLUSION The work conducted with the informal sector in India has shown that it is possible to create a win-win situation by changing the business model applied in the recycling process. Promoting international trade, state-of-the-art technology and applying this alternate business model allows minimizing the impact on environment resulting from improper e-waste recycling, whilst creating a financial incentive. Medium and high boards may be shipped to a refiner as they are, while low- boards need some pre-conditioning for the operation to be profitable. The experiment conducted in Bangalore with a small lot of low- boards showed that by removing some specific bulk parts and selling them locally makes the exporting of the remaining board profitable It is, however, necessary to confirm these findings with a trial shipment of a 10 ton lot. Moreover, the 5 months delay between the shipment and the payment by poses some serious cash flow problem to the recyclers as the informal sector usually works on a day-to-day basis.

7 The successful implementation of this alternate business model is a sine qua non condition for allowing the maximum, but safe participation of the informal sector to the Clean e-waste Channels. REFERENCES Agarwal R., Ranjan R., Sarkar P., (2003) Scrapping the hi-tech myth: computer waste in India. New Delhi, Toxics Link. e-waste guide A knowledge base for the sustainable recycling of e-waste. and (last accessed June 2008) Greenpeace, (2005), Recycling of Electronic Wastes in China & India: Workplace & Environmental Contamination, Greenpeace International, August Hagelüken, C., (2006), Improving metal returns and eco-efficiency in electronics recycling - a holistic approach for interface optimisation between pre-processing and integrated metals smelting and refining, Proceedings of the 2006 IEEE International Symposium on Electronics & the Environment, 8-11 May 2006, San Fransisco, Hagelüken, C., (2006), Recycling of Electronic Scrap at Umicore's Integrated Metals Smelter and Refinery, World of Metalurgy ERZMETALL, 59 (2006) No. 3 Hagelüken, C., (2007), Improving resource recovery from electronic scrap, presentation at Eco- X Conference, Vienna, May Sinha-Khetriwal, D., Kraeuchi, P., Schwanninger, M., (2005), A comparison of electronic waste recycling in Switzerland and in India. Environmental Impact Assessment Review, 25 (2005), , Elsevier. Keller, M., (2006), Assessment of gold Recovery Processes in Bangalore, India, and Evaluation of an Alternative Recycling Path for Printed Wiring Boards. Diploma Thesis at the Institute for Spatial and Landscape Planning, Regional Resource Management at the ETH Zurich. Rochat D., Hagelüken C., Keller M., Widmer R., (2007), Optimal Recycling for Printed Wiring Boards (PWBs) in India, Proceedings of the R07 conference in Davos, September Sepulveda A. (2008) A review of environmental fate and effects of hazardous substances released from electrical and electronic equipments during recycling: examples from China and India. Submitted to Environmental Impact Assessment Review.