WITH over a decade of experience in the precious metals recycling industry, BR Metals founder and managing director Frank Chen knows well that one man’s trash is another man’s treasure. And to build an evergreen business, he also knows the value of mining all suitable opportunities.
Since its inception, the company has recognised the allure of automobile exhaust catalysts that yield platinum group metals (PGMs) such as platinum, palladium and rhodium. PGMs are in high demand, used in manufacturing many types of goods. But they are also among the rarest minerals that can be found in the earth’s crust.
By recycling discarded catalytic converters to reclaim the precious metals, BR Metals is able to sustainably meet demand while reducing the detrimental effects of PGM mining. Recycling PGMs could recover up to 2,000 times more precious metals than mining from the ground, said Chen.
BR Metals sells the recovered materials to partner refineries that process them in the final step of PGM recycling in Singapore. The recovered PGMs are then sold to carmakers in Japan and Korea that reuse them for new catalytic converters.
Exploring options
More recently, however, the company took a shine to silver and gold, finding another unconventional treasure trove in electronic waste, which it collects from companies and non-profit organisations, starting in its Singapore facility.
Other sources of gold include excess gold from bullion traders and gold scraps and dust from jewellers’ manufacturing workshops.
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The company uses the fire-assay method in its newest piece of equipment to test the concentration of gold in these sources. Alternatively, it uses inductively coupled plasma or “wet chemical” analysis, a process which entails dissolving the metal in a solution and “exciting” it with a plasma flame, so that the gold content in the scrap can be analysed.
Gold refining is an old and developed industry, with more readily available information and equipment than that for PGMs, Chen said, but the technology will take time to perfect. The company will go about this through a combination of developing proprietary technology and building on what is available in the market.
“If we develop from the ground up, we can tweak the calibration, the speed, the efficiency to our advantage,” he said. On the other hand, using ready-made technologies without understanding how they are programmed or developed makes it challenging for the company to adapt the know-how for its needs.
In 2021, BR Metals brought in approximately US$213 million in revenue. Chen estimates that gold and silver recycling contributes to about 20 per cent of revenue, with the remaining 80 per cent coming from PGM business operations.
“Green gold” and silver were a “Covid eureka”. The pandemic was at a time when the Singapore government ramped up its sustainability focus, Chen said. BR Metals estimates that it collects some 30,000 troy ounces of gold and silver each month for recycling.
Its PGM-related business has not lost its lustre. The company reclaims about 80,000 troy ounces of PGMs from what it collects every year.
Last year, more stringent vehicle emission regulations in China led to higher demand for PGMs for manufacturing. And mine closures during Covid-19 limited their supply, supporting prices, Chen said. Embargoes on Russia, one of the world’s top palladium producers, also keep prices strong.
Though the company has already carved a successful niche for itself in refining PGMs, Chen believes diversification is necessary for the long-term sustainability of the business, as petrol and diesel cars will eventually make way for electric vehicles and limit feedstock for PGM recycling.
International presence
Foresight was what motivated BR Metals to internationalise, five years after its inception.
The company had started its journey in China in 2009, when the recycling of precious metals was viewed as a high-risk business that was out of place in Singapore’s service-oriented economy, said Chen, a Singaporean. China also had abundant feedstock – the large economy was taking off and more vehicles were being scrapped as people could afford upgrades to better cars.
He set up shop in Guangzhou, processing and recycling scrap materials to extract PGMs in a thriving market that was seeking professionalism and transparency.
Though BR Metals was warmly received there and attracted strong demand for its services, Chen knew that it was vulnerable to concentration risks. Every year, accounting for breaks for Chinese national holidays, operations would be paused for a total of two months, he recalled.
In 2014, BR Metals opened a Singapore office to take advantage of the Republic’s free port and financial-centre status. Excluding waste processed domestically in China, Singapore became an aggregator, consolidating materials from around the region.
The company opened “a small setup” in Cambodia in 2017 and earlier this year acquired licences to operate a Malaysian office, which is expected to add about 25,000 troy ounces to its PGM recovery capacity.
BR Metals is also setting up a representative office in Thailand – a large gold consumer – which it estimates will be running by year-end.
As the company continues to grow, its ability to finance its ambitions is “not a major concern” yet, as it receives financing support from several banks in the form of loan facilities, invoice financing lines and overdraft lines.
“We have US$20 million to US$30 million worth of lines, excluding our own cash reserves,” Chen said. “Our balance sheet is at about US$100 million,” he added, referring to the company’s bottom line.
While he is on the lookout for strategic investors, listing is not on the cards for BR Metals. He sees ample funding and no need for an exit strategy: “I have full faith in the business.”
“A lot of precious metal companies in the world are not listed,” he said. “They are multiple-generation companies, and they refine and further refine, develop and further develop. Tear the old things down, build new ones, for a legacy, for continuity, for the industry, for the business. That’s what I see successful people in the industry do.”
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