A Cost-Benefit Analysis of In-Plant Waste Recycling at Scaw Metals Group

Abstract

The procurement of new landfill sites for in-plant waste disposal presents certain challenges to companies in the steel manufacturing industry. These include the increased costs of the acquisition of land space, as well as the potential adverse environmental and social impacts associated with landfill activities. Scaw Metals Group, an international steel-manufacturing organisation, is currently seeking a recycling initiative for its in-plant waste materials. This is a proposal developed in efforts to shift the company away from its current custom of landfill disposal of all of its in-plant waste materials. This would not only reduce the costs of waste disposal to the company and render it economically beneficial, but it would also provide environmental and social benefits.

This study investigates the economic viability of a nine-month recycling trial that transpired at Scaw Metals Group’s operations in Johannesburg, South Africa, and examines the potential costs and benefits that would be incurred and accrue to the company over time. To buttress the reliability of the cost and benefit estimates obtained, further analyses are undertaken to account for variability in the purchasing price of steel scrap, for the economic outcomes that would arise under different waste diversion scenarios, and for factors that would influence Scaw Metals Group’s decision to adopt or abandon in-plant waste recycling efforts.

The results suggest that the project would be financially worthwhile for Scaw to pursue, and would be robust under the various scenario analyses examined. Further discussion on the limitations of the study and on the critical issues that should be taken into consideration for future analysis concerning this project have been included.