Craig Baron: There's gold in those old computers

Fifteen years ago, Craig Baron looked into the future and saw the birth of a new industry. Until recently, the Welsh entrepreneur used to buy used PCs ­ now companies have to pay him to take them away. Matthew Lewin meets the electronic-waste recycler who has struck it rich

There is a bunch of men in Wales who like to smash up computers. Casings are torn open, processors, chips and circuit boards are ripped out and pulverised; plastic is tossed into one crate, metal into another; cathode ray tubes from the monitors are pulled out and stacked high.

But this is no nest of anti-technology fanatics. This is where computers go to die, and there are going to have to be many more places like this if we are not going to be buried by mountains of dangerous and toxic electronic waste in decades to come.

We all know by now that if a computer is more than a couple of months old, it's already out of date. If it's more than six months old it is close to being obsolete, and we will probably replace it within 18 to 23 months. This is the case with all the millions of PCs (six million were sold in the UK last year) now sitting on desktops in this country. The question is; what will happen to all those hundreds of thousands of tons of plastic, metal, glass and nasty chemicals when we go out and buy a faster, sexier machine with even more memory?

Then there are the millions of tons of obsolete telephones and telecommunications equipment and mobile phones, and the electronic brains in everything from washing machines to radios, television sets and video recorders.

In the mid-1980s, Craig Baron looked into the future and saw the birth of a new industry. With 15 years of experience in the metal business behind him, he looked at the growing pile of electronic junk and realised there was gold in them there machines. And silver. And palladium. And tantalum. And copper. And aluminium.

With the help of a grant from the Welsh Development Agency, he set up Precious Metal Industries (PMI), and in 1989 opened a plant in Neath, West Glamorgan, and set about smashing up computers in earnest. In the old days the process was both primitive and elegant. The precious metal-bearing chips, processors, circuit boards and even copper cabling were pulverised and ground into progressively smaller and smaller pieces, finally becoming a fine grey dust. This was mixed with water and passed over a vibrating table (dubbed "Shakin' Stevens") allowing the various metals to be separated out according to their specific gravities and then collected for smelting. Nowadays it is still primitive and elegant, but a bit more sophisticated. The volume of material is just too great for effective in-house smelting, so the crushed material goes to giant smelters that do the job more efficiently.

Dealing with about 100 tons of circuit boards a month, the company, now employing about 40 people, last year extracted around 500kg of gold, one ton of silver and 150kg of palladium, together worth some £7m.

PMI also refurbishes computers for resale to places such as the Czech Republic and developing countries in Africa. But whereas in the 1980s PMI went round the country actually paying for redundant computer and telecoms equipment, technical changes in the industry and, crucially, impending legislation about electronic waste recycling, has largely reversed that process. While PMI still buys some precious metal-rich material (consignments of faulty and/or obsolete processor chips, for example), nowadays companies have to pay PMI to take their computers away for recycling. And they don't like it.

"Large companies such as banks have thousands of computers that they need to get rid of, and they need to do it responsibly and according to the new legislation that is coming," Baron says. "The last thing they want is reports of monitors floating down the Thames with their logos on them.

"In the old days we used to pay for machines, but technological changes have resulted in the use of far less precious metals in the equipment. Also, legislation based on the EC Waste and Electronic Electrical Equipment (WEEE) directive will eventually demand that we recycle 75 per cent of each computer ­ and it's just no longer economic," Baron says. "I can understand why there is a reluctance on the part of corporates to pay us £10 or £15 per machine to take them away. They may be having to replace 50,000 units, and that could cost them an extra £750,000. But if they don't pay, we can't afford to do it."

Baron recalls one company that rejected his offer of £9,000 for 250 redundant PCs. The finance director was certain that the PCs, which had cost £400,000, were worth more than that. A few months later they came back, only for Baron to offer them £2,000. They turned that down too. "Six months later they rang again, and this time I told them it would cost them £2,000, and he said 'Come and take them away'."

However, PMI has made mistakes, too. "We used to buy old IBM mainframe 168 systems, which we knew had £5,000 worth of gold in them, so we would pay around £2,500 for them. Then we were offered 75 of these 168s and we bought them ­ only to discover that in the meantime IBM had changed from gold to palladium, and instead of being worth £5,000, they were only worth £1,000 each. We lost over £100,000 on that deal."

In 1986, all PMI needed was a scrap-metal dealer's licence. Now such plants have to be registered and licensed as waste transfer stations under the 1990 Environmental Protection Act, and there is a plethora of other regulations to be adhered to regarding the handling of dangerous chemicals and material that are destined for landfill sites.

And, of course, there's the WEEE directive-based legislation, expected to be in place by 2003, which will make the manufacturers responsible for the eventual recycling of a minimum of 75 per cent of electronic equipment.

"Computers will have to be recycled, and the legislation will require that it is the producer who has to pay for that recycling," explains Mark Wolle, another director of PMI. "So what else can the producer do but put that cost on the price of new items?

"Six countries in Europe already have this sort of legislation in place. In some Scandinavian countries electronic waste is recycled through civic amenity centres and paid for out of the rates. Germany has a similar system. And Holland has a recycling tax on the sale of new electronic goods, which is used to pay approved recycling companies," Wolle says.

"We will have to wait and see exactly what the Department of Trade and Industry has in mind for this country. It's going to cost the consumer money one way or another. But it will create a lot of jobs, and stop a lot of harmful materials being dumped in the ground."