Copper granulation proves effective in recovering high value from copper cables.
In recent years, the major telephone companies (Telcos) have experienced massive technological advancements in their backbone networks, as well as their business and residential delivery systems, with fiber optics being the key driver. Copper telephone wiring—now a century old—has limited bandwidth capacity, and fiber optic cables allow for much higher capacity…at much faster speeds…with much less space.
As a result (and to compete with broadcast cable companies) complete networks of fiber-optic cables are being constructed from the central office frames to business customers and residential homes, generating a shift from the old backbone networks of copper cable and supporting equipment such as loading coils, build-out capacitors, air pressure systems and outdoor switching JWI cabinets.
In much the same way that pipelines are the distribution networks for oil companies, copper was the main component of telephone system networks since their inception. Everything from large cable vaults in central offices to complete manhole networks in large cities to massive aerial cable infrastructures, supporting long-distance and local calling systems, consisted of copper wiring. The telecommunication industry’s complete network was based on the world of copper.
But now, most telecommunication companies are investing millions of dollars on the next generation of technology— fiber-optic (glass) cables. As a result, opportunities to recover the substantial residual value of the copper infrastructure that is being abandoned is a business case that is being explored from the executive levels down.
To take full advantage of this opportunity, the investment recovery department must formulate a business plan that covers several key components to maximize the recovery value on the surplus copper assets. As in any major infrastructure project in any industry, there are many factors to consider.
Key components of business plan:
#1. Develop a project scope. This is an overview on the volumes and weights of surplus copper cable that will be encompassed in the project. This component of the business plan should include consultations with the outside plant engineering division and the cable repair and maintenance departments to identify the “low hanging fruit” to maximize the investment recovery value, while controlling expenses. This approach will also provide critical data as to the size, scope and viable expectations on the copper harvesting business case.
#2. Draft a “cost of removal budget.” This budget should include the major components such as:
• Labour costs (or “labor” if you’re not from Canada as I am!)
• Equipment rentals
• Freight logistics
• Traffic control expenses
• Administration costs
• Disposal fees (if applicable)
• Pumper trucks (manhole applications)
• Safety expenses
• Travel expenses, accommodations and meals
• Overtime and lost time due to inclement weather
#3. Construct a team consisting of the following key departments:
• Project manager—IR professional
• Engineering and cable repair
• Copper recycler, e.g., granulator
• Onsite working foreman
• Line crews
• Cable splicers
• Traffic control contractors
• Pumper truck contractor
• Clerical staff
• Power utility contacts
#4. Build a schedule identifying key roles and timelines encompassing the following:
• Project definition
• Project planning and design timelines
• Implementation timelines
• Completion timeline
Usage of a Gantt chart is highly recommended, as it is a very useful tool to track the progression of a project, provides an at-a-glance view and offers a breakdown for the individual stakeholders of their status in the project. I find this to be an excellent reference tool for providing all departments updates as to their roles, timelines and project flow. And although this approach is what I’ve developed for managing major copper harvesting projects, it really is appropriate for any significant program requiring involvement beyond internal IR staff.
#5. Enter into a contractual agreement with a copper recycler that owns or has access to a copper granulator within close proximity to process the surplus copper assets. This allows the IR professional to accomplish three key factors on the business case:
1. 100% control on the disposal method (who, how, when, and where)
2. Maximize the investment recovery value on the copper salvage
3. Address environmental concerns on disposal
ADVANTAGES OF SCRAP CABLE GRANULATION
Granulation machines totally changed the previous method of burning the wire for recycling! The main advantage of copper granulation to process the salvage copper cables that it provides a green, environmentally friendly recycling solution and therefore is attractive to corporate clients trying to manage their carbon footprint.
Cables, generally covered by protective plastic, are loaded into the machine, which then cuts the used cable into small granules. After this, the granules are sent through a separation process using air and vibration, which separates the heavier copper from the lighter plastic and insulation. Depending on the makeup of the cable, there may be some waste stream that cannot be recycled, but virtually 100% of the valuable copper will be recaptured for sale.
In addition to the financial impact of a new revenue stream, the other advantage of granulation is that it provides a green, environmentally friendly recycling solution and therefore is attractive to corporate clients trying to manage their carbon footprint.
During the contractual negotiations with the copper recycler, the IR professional must negotiate a price per pound, with this negotiated price built into the business case. To secure the highest price the IR professional must present some key factors to the copper recycler:
• Total weights, lengths and styles of the salvage copper cables being removed
• Copper recovery percentage of each style of copper cable
• Timelines and locations of removals
• How the salvage copper will arrive at the copper recycler’s facility—(on reels, loose in 20-yard hoppers or having the copper recycler on the job site to collect the salvage copper as it is being removed).
The biggest variable of the price received—which is not in the control of the IR professional nor the copper recycler—is the price of copper generated on the metals markets—which is affected by numerous worldwide factors and can fluctuate on an hourly basis.
The final major component in the copper-harvesting business plan that an IR professional must address is the software or process being used on how the project is being tracked and recorded. This is a crucial element on how all the data—from waybills, billing invoices, revenues generated, hours of labor, efficiency reports, safety records, and weights and styles of removed copper cables—are captured and represented.
The software must be capable of report generations on efficiencies, safety, total tonnage of removed copper, highlighting lengths, weights, copper recovery percentage, styles and removal locations and revenues generated, as well as all labor expenditures related to extraction of the surplus copper cable. The correct software is vital to the health of the project and will play a key role when the IR professional is presenting final summations on the copper-harvesting project to company executives.
Summary: With a strong business plan in place entrenching the key elements, the IR professional can, with confidence, present an excellent business case that is solid, sound and marketable to the company’s executives and when approved, will generate a new revenue stream to a corporation’s bottom line.
Gordon Chennell, CMIR
Chennell Investment Recovery Services Inc.