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Published on 19 Jun 2004 by New York Times. Archived on

E-mail this to a friend Printable version

11 Jun 2004.

Asian Scavengers Feed Hunger for Steel

by JAMES BROOKE

SONGINO, Mongolia - At an abandoned Soviet Army base here,

scavengers dig deep into the earth. Tossing aside concrete casings,

they carry away precious loot: cast-iron water pipes.

Above ground, brawny men, wearing T-shirts and wielding

sledgehammers, smash open abandoned barracks. From crumbling

concrete walls, they pry out the rusted steel reinforcement bars.

In Vladivostok, Russia, a port 1,250 miles east of here, dock

workers have discovered in scrap metal shipments such sundries as

a live artillery shell and what is said to be surplus rails from the

Trans-Siberian Railroad.

In North Korea, idle factories are being quietly stripped of metal that

is then sold across the Yalu River as scrap to China.

RELATED NEWS:

Prices and Production over a

complete Hubbert Cycle: the

Case, of the American Whale

Fisheries in 19th Century...

Book Review: Blackout by

James Goodman...

China outlines ten programs for

energy efficiency...

A little village in the sun...

Climate fears prompt energy Uturn in China...

With its relentless industrial rise, China, once known as the Middle Kingdom, has become a

massive magnet inexorably drawing scrap metal from across Asia.

"I recently drove to the Gobi and saw 100 trucks stuck in the mud, just one after the other,"

Enkhbaatar Ochirbal, a mining consultant in Ulan Bator, said of trucks loaded with scrap metal that

were caught by an unexpected rainstorm in the Gobi Desert. "Earlier, in March, every second truck

going to the border checkpoint seemed be carrying scrap metal."

Steel is the lifeblood of China's booming industrial economy, from bridges to ships to cars. Plans

by General Motors and Volkswagen to double their output of Chinese cars by 2007 only mean ever

greater demand for steel.

To meet this demand, China's steel production is to nearly double during the rest of this decade.

But China's iron ore production is forecast to remain basically flat. To close this yawning gap,

China is signing long-term multibillion-dollar supply contracts with Australian and Brazilian mining

companies.

In March, BHP Billiton, the world's largest mining company, signed a $9 billion deal to supply 12

million tons of ore to four Chinese steel mills for 25 years.

But it is far cheaper to melt existing metal than to process ore. Consequently, China's scrap

imports have almost doubled since 2000. Even with Beijing's efforts to cool economic growth,

imports of scrap steel may double again by the end of 2005.

A result is one of the biggest recycling programs the world has ever seen. Market forces are

cleaning up Asian landscapes that have been long littered with Soviet-era junk.

"Every year, when I would go see my grandmother, I would use as a landmark this big abandoned

Russian bus," said Jargal Byambasuren, a tour guide in this nation, a former Soviet satellite on

China's northern border. "Then the last time I was there, it had disappeared."

The invisible hand of high scrap prices is tidying Mongolia's sere and treeless landscape, a tableau

now picked clean of metal trash. On a recent six-hour drive across the steppe, only two wrecked

cars could be seen. One had been converted into a feed dispenser for livestock. The other car had

been in an accident only a few hours earlier.

"When I was a boy, the only thing to collect around here was cashmere and fuel," Sukhbaatar

Sandagdorj, a 48-year-old road maintenance worker, said in his snug ger, a traditional circular

dwelling kept warm by burning dried sheep dung.

http://www.energybulletin.net/593.html 8/8/2005

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r 

1esource Depletion 

3bles 

19ions 

East 

Asia 

.merica 

merica 

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egions 

)uth and East 

llated Issues 

:ure 

::>rt 

ce Wars & Imperialism 

nics 

ablity 

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uti our fortnightly mailing list: Iyour email subscribe 

= E-mail this to a friend 8 Printable version 

Published on 11 Jun 2004 by New York Times. Archived on 

11 Jun 2004. 

Asian Scavengers Feed China's Hunger for Steel 

by JAMES BROOKE 

SONGINO, Mongolia - At an abandoned Soviet Army base here, 

scavengers dig deep into the earth. Tossing aside concrete casings, 

they carry away precious loot: cast-iron water pipes. 

Above ground, brawny men, wearing T-shirts and wielding 

sledgehammers, smash open abandoned barracks. From crumbling 

concrete walls, they pry out the rusted steel reinforcement bars. 

In Vladivostok, Russia, a port 1,250 miles east of here, dock 

workers have discovered in scrap metal shipments such sundries as 

a live artillery shell and what is said to be surplus rails from the 

Trans-Siberian Railroad. 

In North Korea, idle factories are being quietly stripped of metal that 

is then sold across the Yalu River as scrap to China. 

RELATED NEWS: 

Prices and Production over a 

complete Hubbert Cycle: the 

Case of the American Whale 

Fisheries in 19th Century ... 

Book Review: Blackout by 

James Goodman ... 

China outlines ten programs for 

energy efficiency ... 

A little village in the sun ... 

Climate fears prompt energy uturn in China ... 

With its relentless industrial rise, China, once known as the Middle Kingdom, has become a 

massive magnet inexorably drawing scrap metal from across Asia. 

"I recently drove to the Gobi and saw 100 trucks stuck in the mud, just one after the other," 

Enkhbaatar Ochirbal, a mining consultant in Ulan Bator, said of trucks loaded with scrap metal that 

were caught by an unexpected rainstorm in the Gobi Desert. "Earlier, in March, every second truck 

going to the border checkpoint seemed be carrying scrap metal." 

Steel is the lifeblood of China's booming industrial economy, from bridges to ships to cars. Plans 

by General Motors and Volkswagen to double their output of Chinese cars by 2007 only mean ever 

greater demand for steel. 

To meet this demand, China's steel production is to nearly double during the rest of this decade. 

But China's iron ore production is forecast to remain basically flat. To close this yawning gap, 

China is signing long-term multibillion-dollar supply contracts with Australian and Brazilian mining 

companies. 

In March, BHP Billiton, the world's largest mining company, signed a $9 billion deal to supply 12 

million tons of ore to four Chinese steel mills for 25 years. 

But it is far cheaper to melt existing metal than to process ore. Consequently, China's scrap 

imports have almost doubled since 2000. Even with Beijing's efforts to cool economic growth, 

imports of scrap steel may double again by the end of 2005. 

A result is one of the biggest recycling programs the world has ever seen. Market forces are 

cleaning up Asian landscapes that have been long littered with Soviet-era junk. 

"Every year, when I would go see my grandmother, I would use as a landmark this big abandoned 

Russian bus," said Jargal Byambasuren, a tour guide in this nation, a former Soviet satellite on 

China's northern border. "Then the last time I was there, it had disappeared." 

The invisible hand of high scrap prices is tidying Mongolia's sere and treeless landscape, a tableau 

now picked clean of metal trash. On a recent six-hour drive across the steppe, only two wrecked 

cars could be seen. One had been converted into a feed dispenser for livestock. The other car had 

been in an accident only a few hours earlier. 

"When I was a boy, the only thing to collect around here was cashmere and fuel," Sukhbaatar 

Sandagdorj, a 48-year-old road maintenance worker, said in his snug ger, a traditional circular 

dwelling kept warm by burning dried sheep dung. 

http://www.energybulletin.net/5 93 .html 8/8/2005 
EnergyBulletin.net I Asian Scavengers Feed China's Hunger for Steel I Energy and Peak Oil News Page 2 of 3

Stacked on one side of his portable house were piles of rusted iron: discs from a farm harrow, long

leaf springs from a truck and wheels from a tractor.

"People wander around and pick it up," he said of nomadic herders who had weighed their metal

troves and then left them in his safekeeping for an itinerant scrap dealer. "When the Russians

pulled out, they left a lot of junk. But, it would be good if instead of exporting the iron to China,

Mongolians could recycle it."

Similar laments over Chinese scrap imports echo from this handmade felt ger to the sleek

boardrooms of steel companies in Seoul, Sydney, Osaka and Pittsburgh.

American scrap steel exports to China have tripled since 2002, hitting 3.5 million tons, or $1 billion

in 2003. With China now the largest importer of American scrap, Chinese demand caused

international spot prices to hit $340 in spring 2004, almost triple the levels of one year earlier.

In May, smelters in Australia, Japan, Russia, South Korea and the United States appealed to their

governments to restrict scrap metal exports. In the Russian Far East, scrap export volumes are

running at double the 2003 levels. In a possible prelude to restrictions, government agents in

Russia and South Korea have started to monitor scrap exports closely.

The only serious move has come in Mongolia, where protests were made by the Darhan

Metallurgy Plant, the nation's only steel mill, a Russian-built venture limping along partly because

of a lack of scrap metal. Situated 135 miles north of Ulan Bator by rail, Darhan is a company town

with Mongolia's second-largest urban population, 100,000.

With parliamentary elections set for June 27, the government in late May increased the export tax

2.5 times, to the equivalent of 7 cents a pound. By early June, exports had slowed.

"Most people have stopped taking scrap to China because of the export tax," said the director of

an Ulan Bator yard, who was overseeing the unloading of a truck near the freight rail yards. His

scrap, he said, would instead go by rail north to Darhan.

But many in Mongolia believe that the lull in scrap exports to China will end after the elections, and

the trade will pick up again.

As in the United States, Japan and South Korea, many scrap metal dealers here say they should

have the freedom to sell to the customer who pays the highest prices, currently China. With

rudimentary roads linking a nation twice the size of Texas, many Mongolians say that

transportation costs rule out shipping scrap to Darhan.

"If you transport scrap iron from my district to Darhan, it will be 'gold iron,' " Oyun Sanjaasurengin,

an opposition member of Parliament, said of the prohibitively high cost of trucking scrap from her

area, on the Chinese border, to Darhan, a two-day drive.

Indeed, across the region, the mining for industrial scrap metal continues unabated. In the Russian

Far East, submarines, fishing boats, tanks, broken train wheels are all disappearing into open

maws of bulk carriers destined for China.

The Pacific port of Vladivostok, once disfigured with half-sunken derelict boats, has been cleaned

up, restoring the harbor's reputation as the San Francisco of the Russian Far East. Moving deeper

and deeper into Siberia in search of junk metal, the INI Steel Company of South Korea opened a

purchasing office in 2003 in Yakutsk, 300 miles south of the Arctic Circle.

With much of the easy pickings gleaned, there are fears in Northeast Asia, that the scrap metal

frenzy will go beyond recycling and into theft.

In Mongolia, fences have disappeared from cemeteries, spigots have been torn from public

fountains, and manhole covers have vanished, adding another hazard to walking at night in Ulan

Bator.

Ganbold Chuluun, a public relations adviser to a foreign mining company here, said: "It is irritating

when you wake up and discover you can't use the telephone. Someone has stolen the wire in the

night."

Original article available here.

http://www.energybulletin.net/593.html 8/8/2005

 EE-RM/STD-00-550 COMMENT 86

EnergyBulletin.net J Asian Scavengers Feed China's Hunger for SteelJ Energy and Peak Oil News Page 2 of3 

Stacked on one side of his portable house were piles of rusted iron: discs from a farm harrow, long 

leaf springs from a truck and wheels from a tractor. 

"People wander around and pick it up," he said of nomadic herders who had weighed their metal 

troves and then left them in his safekeeping for an itinerant scrap dealer. "When the Russians 

pulled out, they left a lot of junk. But, it would be good if instead of exporting the iron to China, 

Mongolians could recycle it." 

Similar laments over Chinese scrap imports echo from this handmade felt ger to the sleek 

boardrooms of steel companies in Seoul, Sydney, Osaka and Pittsburgh. 

American scrap steel exports to China have tripled since 2002, hitting 3.5 million tons, or $1 billion 

in 2003. With China now the largest importer of American scrap, Chinese demand caused 

international spot prices to hit $340 in spring 2004, almost triple the levels of one year earlier. 

In May, smelters in Australia, Japan, Russia, South Korea and the United States appealed to their 

governments to restrict scrap metal exports. In the Russian Far East, scrap export volumes are 

running at double the 2003 levels. In a possible prelude to restrictions, government agents in 

Russia and South Korea have started to monitor scrap exports closely. 

The only serious move has come in Mongolia, where protests were made by the Darhan 

Metallurgy Plant, the nation's only steel mill, a Russian-built venture limping along partly because 

of a lack of scrap metal. Situated 135 miles north of Ulan Bator by rail, Darhan is a company town 

with Mongolia's second-largest urban population, 100,000. 

With parliamentary elections set for June 27, the government in late May increased the export tax 

2.5 times, to the equivalent of 7 cents a pound. By early June, exports had slowed. 

"Most people have stopped taking scrap to China because of the export tax," said the director of 

an Ulan Bator yard, who was overseeing the unloading of a truck near the freight rail yards. His 

scrap, he said, would instead go by rail north to Darhan. 

But many in Mongolia believe that the lull in scrap exports to China will end after the elections, and 

the trade will pick up again. 

As in the United States, Japan and South Korea, many scrap metal dealers here say they should 

have the freedom to sell to the customer who pays the highest prices, currently China. With 

rudimentary roads linking a nation twice the size of Texas, many Mongolians say that 

transportation costs rule out shipping scrap to Darhan. 

"If you transport scrap iron from my district to Darhan, it will be 'gold iron,' " Oyun Sanjaasurengin, 

an opposition member of Parliament, said of the prohibitively high cost of trucking scrap from her 

area, on the Chinese border, to Darhan, a two-day drive. 

Indeed, across the region, the mining for industrial scrap metal continues unabated. In the Russian 

Far East, submarines, fishing boats, tanks, broken train wheels are all disappearing into open 

maws of bulk carriers destined for China. 

The Pacific port of Vladivostok, once disfigured with half-sunken derelict boats, has been cleaned 

up, restoring the harbor's reputation as the San Francisco of the Russian Far East. Moving deeper 

and deeper into Siberia in search of junk metal, the INI Steel Company of South Korea opened a 

purchasing office in 2003 in Yakutsk, 300 miles south of the Arctic Circle. 

With much of the easy pickings gleaned, there are fears in Northeast Asia, that the scrap metal 

frenzy will go beyond recycling and into theft. 

In Mongolia, fences have disappeared from cemeteries, spigots have been torn from public 

fountains, and manhole covers have vanished, adding another hazard to walking at night in Ulan 

Bator. 

Ganbold Chuluun, a public relations adviser to a foreign mining company here, said: "It is irritating 

when you wake up and discover you can't use the telephone. Someone has stolen the wire in the 

night." 

Original article available here. 

http://www.energybulletin.net/5 93 .htrnl 8/8/2005 
EnergyBulletin.net Asian Scavengers Feed China's Hunger for Steel I Energy and Peak Oil News Page 3 of 3

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this site for purposes of your own that go beyond `fair use, you must obtain permission from the copyright owner.

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FAIR USE NOTICE: 

This site contains copyriglJted material the use of which has not always been specifically authorized by the copyright owner. 

We are making such material available in our efforts to advance understanding of issues of environmental and humanitarian 

significance. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the 

US Copyright Law. In accordance with Title 17 U.S.C Section 107, the material on this site is distributed without profit to 

those who have expressed a prior interest in receiving the included information for research and educational purposes. For 

more information go to: http://www.law.comell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from 

this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner. 

http://www.energybulletin.net/5 93 .html 8/8/2005