June 22, 2008

Precious Metal With a Caveat: Limited Uses for Nickel Give Recycling Firms Second Thoughts

By Joe Walker, The Paducah Sun, Ky.

Jun. 22--Tight federal restrictions are discouraging commercial attempts to recycle hundreds of millions of dollars worth of mildly radioactive scrap nickel at the Paducah Gaseous Diffusion Plant.

Once the nickel is cleaned, the Department of Energy will allow its use only in reactors and other nuclear applications, said Mike Hargett, president of Chemical Vapour Metal Refining-USA in Union Mills, N.C.

He said his firm's plan for a 50-employee recycling factory at the plant hinges on relaxing the standards to include other uses. CVMR customers in the electronics industry strongly considered locating near the plant to save on energy and shipping costs, Hargett said.

"The customers we've talked to have a very favorable view of Paducah," he said. "At one point we were looking at 800 to 1,000 jobs."

Emerging nations such as China and India are using as much nickel, chrome and other metals as they can get, driving up the value, he said.

CVMR designed, built and started a nickel refining and recovery plant for a mining company in Jilin, China, about 30 miles from the Korean border.

"They canceled their order for a 2,000-ton system to order a 6,000-ton system," he said. "The Chinese are really influencing the world economy. They're one or two steps ahead of us."

U.S. restrictions prevent using the nickel in electronics, even though CVMR's decontamination process leaves the scrap radiation-free, Hargett said.

"I think this really has to be a political decision rather than a bureaucratic or commercial one," he said. "There's got to be some political firepower behind this to get some of this changed."

Rep. Ed Whitfield, R-Hopkinsville, wrote a letter in 2006 urging Energy Secretary Samuel Bodman to allow the community to reap proceeds from nickel recycling. Some of the money should be returned to Paducah to lessen the impact of job losses following the closure of the 1,100-employee plant starting in 2012, Whitfield said.

DOE has discussed moving the declassified Paducah material to Oak Ridge, Tenn., where classified shredded nickel is stored. If that happens it would be a big blow locally, said Mayor Bill Paxton, co-chairman of a local task force to make use of the Paducah plant once it closes.

"We're disappointed because we feel like it's our nickel," he said. "If there's any way we could process it locally and create jobs, that would be the best of all decisions."

Business interest

Hargett's firm was among a dozen that toured the Paducah plant a year ago to discuss the nickel. CVMR interest began before 1995, when DOE determined it was safe to sell the nickel for decontamination and international resale. But the purchaser balked then because restrictions were too tight, he said

In 2000, DOE banned releasing the nickel after people expressed fear of it winding up in consumer products, such as dental braces and cooking utensils.

Now the agency is considering letting private industry use the nickel in radiological applications only. A new, 160-page draft environmental assessment weighs limited uses against burying the scrap or continuing to store it. DOE is taking public comments over the next month to fold into a final assessment by the end of year, after which it will could seek contract bids.

The Avatar Group of Cunningham wants to use the nickel to build batteries to store and sell electricity generated during periods of low use. Avatar's Larry Copeland told the task force in February that a 200-job facility would cost six times less and produce at least two-thirds more electricity than a start-up nuclear power plant.

He said a $1.25 million factory to melt the scrap nickel and reform it into battery plates could be built in roughly 100,000 square feet of the Paducah plant. Avatar has exclusive U.S. rights to develop and sell the technology, but would need to partner with a nuclear power company to finance the plant, he said.

"We're continuing to look for grant money with the task force's assistance and are still talking with TVA and other large utilities that would seem to benefit from a pilot plant," Copeland said last week.

Another company eyeing the scrap metal is Anaheim, Calif.-based Toxco, which in 2004 removed 70 scrap fluorine cells from the Paducah plant and saved DOE $2.5 million in cleanup costs in a PACRO-brokered deal. Removed from one of the plant's most contaminated buildings, the cells were used decades ago in fluorinating uranium for use in nuclear fuel.

Citizen support

Plant citizens advisory board members have issued three recommendations since 2007 supporting nickel recycling. The latest, in March, advised DOE to develop a strategy for recycling all metals at the 56-year-old factory by safely cleaning the material for commercial use and avoiding plummeting prices.

Because of surging demand, nickel prices jumped sixfold from 2002 to 2007 before falling sharply over the past year. The cash price on the London exchange is still more than $23,000 a ton.

Board Chairman Allen Burnett, a plant retiree, said nickel, copper, aluminum and other valuable metals in electrical equipment should not end up in a landfill.

"They have the potential to generate as much or more nickel than is on the ground when they tear down the plant," he said. "We're trying to not only make sure we don't waste the material but give Paducah the best opportunity to benefit from it."

Joe Walker can be contacted at 575-8656.



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