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Warnings of US lead smelter cuts

United States – In order to comply with tight environmental rules, the US lead recycling industry will be required to invest an estimated US$ 600 million, leading various recycling experts to believe that this additional financial pressure will pose a long-term challenge to the entire sector.

A part of the on-going tightening in legislation is the US Environmental Protection Agency’s revision of its air toxics standards for secondary lead smelters, which will come into force in January 2014. With Mexico’s standards remaining more lax, this is certain to increase competition and is expected to put pressure especially on those players without a well-established collection system for old batteries.

Neil Hawkes of industry consultant CRU Group comments: ‘I think it’s inevitable that the situation is going to become unsustainable. You can’t just continue with that trend of higher costs of producing secondary lead and more smelting capacity chasing that scrap. At some point, something’s going to have to give.’ For this reason, he predicts a smelter cut in the near future.

Johnson Controls estimates the North American lead recycling industry will spend around US$ 600 million on meeting the new regulations – with US$ 162 million coming from its own funds. ‘The cost is not prohibitive yet, but it is significant and there probably will be some shake-out in the industry,’ remarks the company’s President Alex Molinaroli.

However, the Environmental Protection Agency has told Reuters of its confidence in the industry’s abilities, stating: ‘We anticipate that they will be able to comply.’

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