The unit was meant to show that Europe could recover critical metals from the waste. It ran for less than four years.
The closure
Rhodia, a French chemical company, had a unit at Saint-Fons plant that recycled rare earths from used lamps. The unit opened in 2012 and stopped at the end of May 2016.
A unit with a permit has to file a formal notice when it stops. Rhodia didn't, and the prefect of the Rhône, who represents the state there, ordered it to.
The unit was meant to show that Europe could recover critical metals from the waste. It ran for less than four years.
Why it stopped? It starts with what it was built to recover.
Glowing Dust
Inside a fluorescent tube there is a white coating. It's a powder that contains rare earths.
Luminostar is Rhodia's trade name for the powder. It sold it to the companies that made lamps and screens. In 2005 Rhodia listed screens first among its uses. A year later, lamps came first in one of its lists, ahead of screens.
Why did lamps jump ahead?
Turn your phone sideways to read the charts. They are best on a desktop.
What is in a lamp, and what is in the powder
Up to a fifth of the powder is rare earths: lanthanum, cerium, terbium, yttrium, europium and gadolinium.
Demand
A series of events made it look like something had fundamentally changed in the market.
Demand, 2007 to 2009
Governments started banning the old incandescent bulb. The main replacement, the low-energy bulb, needed the powder.
- 2007
Low-energy bulbs start replacing incandescent ones. Rhodia says this switch is speeding up demand for its lamp powder.
- 2008
More low-energy bulbs are sold, and Rhodia sells more lamp powder with them.
- 2009
Rhodia says bans on incandescent bulbs in the United States, Europe, Japan and China are now driving the market.
When a lamp burned out, specialist firms took it apart. They recovered the glass, the metal, the plastic and the mercury. The powder went to landfill.
Europe threw away about 1,500 tonnes of it every year.
Rhodia sold the rare earths into the lamps. At the end of the lamp's life they went into landfill. And Rhodia had a plant that could get them back.
The spare plant
Rhodia owned a separation plant at La Rochelle.
That plant was the main reason Rhodia started recycling. Rhodia was also looking east. In November 2008 it opened a research centre in Shanghai, partly to design rare earth products for the low-energy lamp market.
By 2010 Rhodia had the powder, the separation plant and a lab working on lamps. The lamps were selling well. Sooner or later they would come back as waste, and in France somebody was already collecting them.
Récylum
In France used lamps were collected by Récylum. It was founded by four lamp makers: General Electric, Havells Sylvania, Philips and Osram. Each held a quarter of the votes.
In 2009 Récylum started working with Rhodia to get some of the rare earths back out of the lamp powder. That was two years before anything was announced.
Keep those four names in mind. They made the lamps. Through Récylum they collected them. Later they will matter a lot.
For two years the work stayed private. Then something happened in China.
A second source
In 2010 China cut its export quotas and rare earth prices jumped.
Rhodia needed other ways to get raw material, and recycling was one of them. In its report for the first half of 2011 it named two new recycling processes, the lamp powder and nickel-metal hydride batteries with Umicore. It called them important levers to secure and diversify its rare earth supply, running by early 2012.
A recycling plant is a business like any other. It has to earn more from what it recovers than it spends on getting it back. If it can't, it needs someone else to cover the difference, usually the state.
The money
In 2011 the Belgian chemical group Solvay bought Rhodia. The two recycling units cost 15 million euros.
Part of the money was paid by The European Union fund for environment projects called LIFE+. Solvay applied to it with a project called LOOP, to show that the powder from used lamps could be recycled on an industrial scale.
The LOOP budget was 2,198,903 euros, and Solvay asked the EU for half, 1,099,451.
That was the help. However Rhodia also expected the plant to be profitable, but how profitable?
Very profitable
Rare earth prices were high, and supply was at risk. Solvay staff later told researchers both were part of the decision.
Tonnage
Solvay opened the two units in September 2012, one at Saint-Fons and one at La Rochelle. It designed the process for 1,100 to 1,500 tonnes of waste a year. How much powder they processed, Solvay never said. However Récylum published their figures.
Every year Récylum reported how much of the lamps it treated came out as powder sent to recycling, and how much as powder sent to hazardous landfill.
Year | Powder recycled | Powder to landfill |
|---|---|---|
2012 | 1.22% | 1.21% |
2013 | 0.44% | 2.29% |
2014 | 0.17% | 2.26% |
2015 | 0.35% | 2.65% |
2016 | 0.00% | 1.67% |
In the first year about half the powder went to Rhodia. From the second year about nine parts in ten went to landfill.
In 2014 Récylum treated 4,500 tonnes of lamps. That makes about 8 tonnes of powder for Rhodia, and about 100 tonnes for the landfill.
The big number in the interactive below tells you how many years the plant needs to pay back the 15 million euros it cost. It opens on what happened in 2014. You can drag the first handle to send more lamps to the plant, up to all the lamps France sold or the plant's full capacity. Drag the second handle to change the price of the rare earths, from today's price to the 2011 peak. This handle moves the price of all six rare earths together. To set the price of each one yourself, click "Set each of the six prices". To see every number behind the sum, click "Spreadsheet view". In 2014 the powder of 3.4 million lamps reached the plant. At 2015 prices, 70 euros for a kilo of the six rare earths, the plant needs 156 years to pay back its 15 million euros.
The plant needs
years to pay back its €15 million cost from selling the rare earths worth €70 a kilo from 3.4 million lamps.
2014
collected
France
capacity
time
peak
Récylum’s own report said about 20% of the powder could be recycled. Its own table shows a third of that went.
Récylum said the rest was of a quality that did not allow recycling.
And the process was built for French lamps. Researchers at the University of Leuven wrote in 2013 that it was “optimized for recycling of REEs from lamp phosphors from French End-of-Life lamps, but the lamp phosphor composition varies widely throughout Europe.”
Eight tonnes of powder a year could not pay for the plant. What the rare earths were worth depended on the price.
Volatile Business
Rare earths were making Rhodia a lot of money. In the first half of 2011 Advanced Materials, the segment that had rare earths and its silica, made 124 million euros of recurring EBITDA, against 52 million a year before. Its margin went from 20.8% to 30.9%. Sales were 401 million euros, against 250. In six months it made more than in the whole of 2010, when it made 114 million.
Rhodia said most of that came from higher margins, thanks to good prices and the competitiveness of its sources of supply. The price effect alone was 56 million euros.
The report does not say what those sources of supply were. Two are in Rhodia’s earlier report: stock bought before prices rose, and two Chinese companies it controlled, Baotou at 55% and Liyang at 96.32%.
The good years did not last. In 2013 Rare Earth Systems sold 298 million euros, against 434 million in 2012.
The EU’s page for LOOP says the process ran in a commercial plant, and that its finances were tied to rare earth prices on world markets.
This is what made it a volatile business. What the recycled rare earths were worth depended on the world price, and Solvay had no control over it. Who bought them was not up to Solvay either. The buyers were the lamp makers, the same companies that, through Récylum, decided how much powder reached the plant in the first place. Solvay sat in the middle, with the price on one side and the lamp makers on both ends.
Why it Failed
Some recyclers continue to see the small amount of powder as a barrier to act and prefer the small cost of landfilling over a possible change in their operations required to send the powder for further recycling, and Solvay “only pays the recycler for the separated waste phosphor powder. So the recycler earned little from sending powder to Solvay and saved little by doing it, and landfill was the easy route.
The lamp makers had their own route, and the patents. Solvay was the first large commercial recycler, Osram and Philips also ran pilot scale recycling projects. Philips had worked on it with the Belgian waste firm Indaver, on a process to recycle the powder from its own tubes. In 2013 it was still “not operational at a commercial scale.” Osram also patented its method for recovering terbium, europium and yttrium from used fluorescent lamps, filed in Germany in 2006 and granted in the United States in 2011. Osram also had the patent of the powder mixture.
The companies that owned the collection body set the powder recipes and, in Osram’s case, held a patent on recovering the rare earths. They did not need it.
Why Solvay could not simply sell the separated oxides to someone else
Once separated, the oxides are ordinary products anyone can buy, and Solvay looked into selling them for uses other than lamps. It concluded the competition was too strong. Three things stood in the way.
First, the valuable elements mostly go into phosphors, the glowing powders of lamps and screens. Figures from the United States Geological Survey put europium at 100% phosphors, terbium at 89% phosphors and 11% magnets, and yttrium at 54% phosphors, 32% ceramics, 12% other and 2% glass. And phosphors mostly mean lamps: “Fluorescent tubes represent nearly 90% of the total market”.
Second, outside lamps the recycled oxide met mined oxide at the market price, and once prices fell the mined one was cheaper.
Third, Solvay was its first customer: the recovered rare earths were made into “new phosphor precursors for new energy-efficient lamps”. When that business shrank with LEDs, the main buyer went with it. And no buyer could fix the feed: with about 8 tonnes of powder from Récylum in 2014, there was little to sell.
The lamps turned to LED. In 2014 sales of compact fluorescent lamps in France fell 17%, to 42.6 million, and LED lamps rose 87%, to 37.1 million. Récylum called it a complete reversal. An LED holds almost no rare earths. The lamp makers who were meant to buy the recycled powder were making fewer lamps that needed it.
The End
In 2015 Solvay wrote that the decision had been taken to end the rare earth recycling, due to significant price depression in the world market for these materials, and that closing both plants by the end of the year was being considered.
Next
In 2017 EucoLight, the association of Europe’s lamp collection bodies, launched a technical study of other ways to recycle the powder instead of landfilling it. Osram, one of the four lamp makers behind Récylum, had its own way to get the rare earths back. In the next part we look at Osram and at Global Tungsten & Powders, a company in Pennsylvania, to see whether it worked.
This investigation was published.
Most are not public on my website. I carry out investigations like this one privately, for investors before they commit and for lawyers building a case.
Confidential enquiries can be encrypted.
References
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