Found: $57 Billion in the Trash
According to a recent U.N.-backed study, the world's pile of e-waste grew to record levels last year.
The study estimated the world has now amassed 53.6 million metric tons of old cellphones, laptops, flat-screen TVs, and other electronic devices. That's about 16 pounds of e-waste per person.
The authors calculated the combined weight of all trashed electronic devices just last year was equivalent to 350 cruise ships. Antonis Mavropoulos, president of the International Solid Waste Association and study contributor said:
E-waste quantities are rising three times faster than the world's population and 13% faster than the world's GDP during the last five years.
It's a lot of trash. But all that trash holds a secret...
A secret worth at least $57 billion according to that study.
Every smartphone, computer, TV, or almost anything with a battery or a plug contains tiny bits of gold, silver, rare earths, and other valuable metals used, for example, to conduct electricity on circuit boards.
It's not much. According to the U.S. Geological Survey, there are only about 0.034 grams of gold in each cellphone –– along with about 16 grams of copper, 0.35 grams of silver, and 0.00034 grams of platinum. At current prices, that's only about $2 worth of metals.
In something bigger, like a broken laptop, there is still only about one-tenth of a gram of gold –– worth only about $5.70 at current prices. That doesn't seem like very much for a single dead laptop. But if you had a mountain of broken laptops, as the world does, $5.70 per device quickly adds up. The U.N.-backed study estimates the valuable components of the world's e-waste to be worth about $57 billion.
It turns out that some e-waste is, in fact, recycled for precious metals but not much. According to the EPA, only about 12.5% of e-waste even makes it to the recycle bin. And from there, only a small fraction is actually recycled. The rest is mostly shipped off to Third World countries and landfills.
It's tempting to think the world's e-waste in landfills could be mined. Consider this...
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If the average laptop weighs around five pounds and there are 0.10 grams of gold in each laptop, one metric ton of laptops would contain about 44 grams of gold. In mining terms, that's an insanely high gold grade.
According to the World Gold Council, a high-grade gold mine operates using ore that averages from eight to 10 grams per metric ton. A low-grade gold mine can operate with ore averaging under one gram per tonne. So at 44 grams per tonne, why isn't anyone mining laptops yet?
Well, there are a few good reasons. Firstly, it simply costs too much to recover gold from electronics. It's not impossible to make a profit by recycling precious metals from e-waste; it's just not really worth the time.
There are a million YouTube videos of individuals claiming to have made money recycling gold from laptops themselves. But operating a business to recycle precious metals from e-waste is a different matter altogether. And at the end of the day, for both the individual and a business, there are other way more profitable ventures to spend time on.
For example, I'm sure if you spent enough time with a metal detector on a beach, it would be a profitable venture. But you could be making more money doing a lot more.
More importantly, though, may be the fact that the world's e-waste is spread all over the world. Sure, if you have all 53.6 million metric tons of this e-waste all sitting in one place, it might be quite profitable to recover the valuable materials. But unfortunately, that's not the case. It's all over the place.
So there might be $57 billion in gold, silver, and other precious metals in the trash. But most of it is probably just going to sit there for now. Even if the price of gold increases substantially –– which we believe it will –– there's little chance we'll see much urban mining for gold and precious metals in the near future.
Decades from now, the world's situation might be different. But for now, even if gold shoots up to $5,000 an ounce –– which, again we believe could be in the cards for the yellow metal over the next several months –– mining e-waste for gold on a large scale won't be worth it. At $5,000 an ounce, the $5.70 worth of gold in a laptop now would become worth a little more than $16.
So it's probably not very profitable to mine e-waste for gold on a large scale, even with rising gold prices. What is extremely profitable is mining for gold the regular way: digging it out of the ground.
Resident gold expert Chris DeHaemer explains:
When gold prices runup, gold miners can leverage that run-up by substantial multiples. The reason is pretty clear: Each dollar over cost the miner can sell gold for is pure profit.
So, if it costs a miner $1,000/ounce to pull gold out of the ground and it can sell it for $1,200/ounces, it makes $200/ounce in profit. If the price of gold goes to $1,400/ounce, the miner's profits go up 100%!
DeHaemer and I recently published a new report, where we explain why we believe the price of gold is set for one of its biggest and most powerful bull markets in history and lay out the details on three very specific gold stocks we believe are positioned to reap the biggest profits for today's investors.
You can check out that report for free now by clicking here.
Until next time,
As an editor at Energy and Capital, Luke’s analysis and market research reach hundreds of thousands of investors every day. Luke is also a contributing editor of Angel Publishing’s Bull and Bust Report newsletter. There, he helps investors in leveraging the future supply-demand imbalance that he believes could be key to a cyclical upswing in the hard asset markets. For more on Luke, go to his editor’s page.
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