Choice of Refinement

Kevin M. Beirne, Sabin Metal Corp., USA,
advises cautious investigation of refining practices
when reclaiming valuable metals from spent catalyst.

Refining and processing costs for converting crude oil into its hundreds of different components are expensive, and they are not likely to reduce in the near future. For this reason, many companies seek means of reducing costs wherever practical, which obviously enhances profitability. However, while there are many ways of achieving this, the subject of maximising returns for the remaining precious metals in spent process and pollution abatement catalysts often finds itself ‘short changed’. This is an unfortunate situation, which can be avoided, as working with the right refining organisation can be a pleasant and rewarding experience. What is perhaps more important is that the implications associated with working with the wrong refiner can be both serious and costly.

Most hydrocarbon processors use fixed bed reaction catalysts to facilitate hydrogenation of various intermediates. Many processors also use precious metal catalysts to control and/or abate harmful or unlawful exhaust emissions for ‘end of pipe’ applications. Regardless of how catalysts are used (or whether they take the form of monolithic structures, pellets, beads or extrudates), precious metals refiners will probably be required to recover valuable metals from spent catalyst substrates and carriers.

The catalysts used in the refining process are typically referred to as ‘PGMs’; precious metals of platinum, palladium and rhodium (although gold and other precious metals can also be used in some catalysts). The metals are used with a variety of carriers, depending upon the requirements of the particular application, and include soluble or insoluble alumina, silica/alumina and zeolites.

Almost all organisations processing hydrocarbon source materials depend upon precious metals refiners to reclaim the valuable metals from their spent catalysts. In addition to precious metal bearing catalysts, other sources of precious metals include such process byproducts as filter cakes; papers; cloths; polishing filters; floor sweepings; and protective clothing. However, many catalyst users may not be aware of the legal implications of becoming involved with the effluents or atmospheric discharges produced by the refiners they select. Picking the wrong refiner can be a costly mistake. There are legal implications when working with a precious metals refiner, concerning possible effluent or atmospheric discharges at the refiner’s facility. Violations are taken seriously. The question is; how does one set about choosing the ‘right’ refiner?

There are many criteria to consider when selecting a precious metals refiner. However, before that discussion, we should look at the various methods used to help maximise returns for spent precious metals catalysts. Essentially, there are three critical factors that the refiner can control, which apply to almost all precious metal bearing materials: sampling, assaying and processing turnaround time.

Precious metals sampling

In order to determine the amount of precious metal in materials available for recovery, three sampling techniques can be used: dry, melt and solution sampling. Each of these techniques offers specific advantages, and determining the most appropriate sampling method depends upon the type of material being processed, and its estimated precious metals content.

The principle of sampling involves ‘reducing’ large quantities of precious metal bearing material (as much as several t) into small quantities (as little as a few g). Samples are then extracted from different fractions and/or different stages of the resultant sublot for analysis. The sampling procedure begins with the conversion of precious metal bearing scrap into a homogeneous mass, such that molecules of precious metals and other constituents are evenly distributed. The results of sampling the homogeneous mass thus represent an accurate ratio of the precious metals content in the overall matrix.

Figure 1. Typical melt sampling process. A carrier metal, such as copper, is melted along with the precious metal bearing material. The resultant metal is poured into ingots, which are then sampled at the beginning, middle and end of the pour.

Melt sampling

In melt sampling (Figure 1), a carrier metal such as copper is melted along with the precious metal bearing material. The resultant molten metal is then poured into ingots, which are sampled at the beginning, middle and end of the pour. Subsequent processing steps yield an extremely high degree of accuracy, with tolerance reaching as close as ± 0.1% between samples.

Figure 2. Solution sampling achieves a homogeneous dispersion of precious metals and other constituents, down to the molecular level.

Solution sampling

Solution sampling (Figure 2) is used for precious metal bearing solutions, and is both cost effective and extremely accurate for determining precious metals content. This technique also involves achieving a homogeneous dispersion of precious metals and other constituents to the molecular level, with a precision comparable to that achieved when melt sampling. Multiple samples are also taken from different parts of the solution for further analysis.

Figure 3. Materials for dry sampling are homogenised, generally by grinding large pieces into smaller and smaller particles. The material is allowed to free fall in a stream, into a crosscut, timed automatic sampler.

Dry sampling

Dry sampling (Figure 3) is used whenever materials cannot be dissolved in solution, or when they are inappropriate to melt either because of their structure, or because of the cost associated with melting vs the possible return. As it is difficult to achieve homogeneity, dry sampling is more complex and potentially less precise than either melt or solution sampling. In fact, this method requires more judgmental skills than do the others. Materials for dry sampling are homogenised; generally by grinding large pieces into smaller, ever finer particles. The material is allowed to free fall in a stream into a crosscut, timed automatic sampler. Representative samples are taken periodically, and the sampling accuracy is typically ± 2%. Precious metal bearing catalysts are usually sampled with this technique.

	Figure 4. This continuous catalyst sampling system generates homogeneous, consistent and reproducible intermediate samples. Automated sampling procedures produce samples that accurately represent entire lots of spent catalyst.

Assaying

Figure 5. This analytical laboratory uses advanced x-ray fluorescence equipment, atomic absorption and inductively coupled plasma emission spectroscopy instrumentation, and also employs classic volumetric, gravimetric and fire assay techniques.

Processing turnaround bottom line

The speed at which catalysts are processed, and the precious metal recovered (reclamation turnaround time), is the third key factor in the ‘maximum return’ equation. Logically, faster processing turnaround should minimise interest charges accrued for leasing replacement precious metals to eliminate process downtime. It also avoids the necessity of purchasing PGMs, on a volatile spot market, for use in the timely manufacture of catalysts. This allows uninterrupted processing and production. The cost of PGMs has been fluctuating wildly over the past few years, at one point reaching as high as US$ 1100/oz for palladium, and up to US$ 700/oz for platinum. These high costs obviously add to the overall expenses for the processing and production of almost all crude oil byproducts. Whilst these metal prices have decreased since those highs, there is still good reason to seek out a precious metals refiner who can return maximum value.

As prices for PGMs rise, recovery/refining processing turnaround time increases, and lease rates (the most common method for financing PGMs) move up, the stage is set for a classic profit squeeze. Whilst any of these factors will decrease profits, the combination of all three could have a dramatically negative effect. At high PGM prices, users are forced to seek relief in a number of different directions. As metal market prices are unlikely to be inferred, the next best place to turn is to the precious metals refiner. The refiner has some control over precious metals management; at least as far as returns are concerned.

Leasing and pool accounts

Precious metals used in catalytic processes, particularly platinum and palladium, are not purchased on an outright basis by their users. Rather, they are held in a ‘pool account’, at one of a number of physical locations where the metal is commingled with other owners’ or lessees’ metal. Owners or lessees of these materials either ‘draw’ on this material on an ‘as needed’ basis, or are provided with credit from a pool account. Users can request delivery of metals from this pool, for incorporating with catalyst products.

Leasing PGMs for catalyst production is strictly a financial transaction, in which the user has no desire to purchase the metal, but rather ‘borrows’ it as one would borrow money from a bank. In the precious metals industry the practice is known as ‘leasing metal’, and it is strictly a financial mechanism, with widely varying lease rates that depend upon supply and demand. In fact, the rate fluctuation is substantially greater than borrowing money from a bank at a fixed rate, which is generally fairly constant and much more predictable. Most businesses can usually borrow money from lending institutions at one or two points above prime. Metal leasing rates, however, have been as low as 3%/yr and as high as 200%.

In addition to leasing precious metals, there is another practice in the precious metals industry, commonly referred to as ‘banking’. This is where owners of metals ‘lend’ them to institutions (or other businesses), who pay interest charges to the owners, just as a bank would pay interest on dollar deposits. These institutions then lease out these metals to users as a means of generating profits. This practice does not appear to be too common with regard to PGMs employed by catalyst users, but is more closely associated with metals speculation or accumulation for future consumption. For example, a speculator or consumer may purchase metal today, but not physically require it for another six or 12 months. In order to defray some of the financing costs, they may ‘lend’ this metal back to the market.

Most users make a decision as to when to lease and when to buy precious metals, based upon their perception of prevailing lease rates and their trends over extended time periods. Many catalyst users prefer not to ‘own’ precious metals, as they do not want their costs to appear on the balance sheet as inventory or a fixed asset. Consequently, they are willing to incur added expense by leasing. Those who lease precious metals do not usually consume them, but rather use them either to produce their products themselves, or to have others fabricate them into catalysts. As much of the precious metal in catalysts is recoverable, users retrieve their metal after the recovery and refining process.

Due to these operating practices, it is in the best interest of precious metal catalyst users, to obtain the highest possible percent recovery for their precious metals and to work with a refiner that offers the fastest possible processing turnaround time so as to minimise lease charges.

Recovery processing time affects profitability

It can take as long as three months to have a new catalyst fabricated, and as long again to have the spent catalyst reclaimed; a period of six months during which new metals may have to be financed. A simple (and realistic) example to illustrate the point is a 40 000 lb shipment of 0.6% platinum catalyst with platinum at US$ 650/oz and a lease rate of 12%. Leasing the metal contained in this material costs in excess of US$ 5000/week. As a result, if one refiner has a six week turnaround, and another a 12 week turnaround, the additional six weeks will cost more than US$ 30 000 in lease charges.

Variations in lease rates are governed by worldwide production for primary (mine production) sources, and the immediate, local availability of physical metal. For the catalyst user, PGM lease rates usually represent a significant cost, as ‘new’ precious metals are often financed, while spent catalysts are being recovered and refined. By providing faster spent catalyst reclamation turnaround times, substantial cost savings can be realised; in many cases translating into hundreds of thousands of dollars each year. These are serious numbers, and there is a clear industry trend towards establishing independent asset recovery programmes (or departments), functioning as profit centres for the recovery of precious metals within an organisation.

Environmental concerns and legal implications

Many of the financial issues surrounding the recovery and refinement of spent catalysts have now been covered, and some of the legal implications associated with processing procedures at the precious metals refiner must be considered. In addition to choosing the wrong refiner with regard to maximum recovery and fastest possible turnaround, choosing the wrong refiner with regard to possible effluent or atmospheric discharges can be even more costly.

Avoiding legal and environmental problems

When selecting a refiner, one must be aware not only of how one’s own materials will be processed, but those of other customers as well. It is advisable to determine how any solid, liquid or gaseous byproduct is handled at the processing facility.

There will ideally be no hazardous waste materials shipped from a precious metals processing facility. Some plants ship them under approved procedures and conditions, and it is necessary to learn the difference. In addition, minimal pollutants are emitted before, during or after refining. Exhaust air quality is managed with state-of-the-art pollution control systems. The process water evaporation procedure minimises all causes of pollution. While each of these functions is fundamental, there are many hidden pitfalls with regard to environmental compliance.

Request full documentation

Requesting detailed documentation on environmental law compliance also helps to determine that the refiner selected does not violate any applicable law or regulation. In the USA, the Superfund Act addresses the direct responsibility of customer and refiner. This law mandates that the company that is the source of the materials for precious metals recovery, and the precious metals refiner, share in the ‘cradle to grave’ responsibility, as well as future liability for the proper treatment and/or disposal of any materials. When choosing a precious metals refiner, it is important to ensure that the one selected does not violate any applicable environmental laws or regulations. Copies of all detailed documentation relative to legal compliance should be supplied.

It is essential that the environment is protected to avoid serious financial and legal consequences. The refiner’s violation of environmental laws and regulations can result in heavy fines and legal costs.

One way to determine whether a refiner has met these criteria is to check the use of appropriate pollution abatement technology, such as afterburners, bag houses, wet scrubbers and liquid effluent neutralising equipment. The refiner’s approval status should also be evaluated with all applicable agencies at local, state and federal levels. Most precious metals refiners are pleased to provide copies of all required documentation, which could include permits under the ‘Clean Air and Water Acts’. They can also prove that the company qualifies as a bona fide precious metals refiner, as specified in the preamble to the ‘Boiler and Industrial Furnace (BIF)’ rule and its amendments.

Conclusion

While there are many variables associated with recovering precious metals from spent catalysts, one should be aware that they are generally interrelated. When evaluating a precious metals refiner, they must all be considered. Adherence to the full compliance issues concerning environmental regulations is most important. All else being equal (i.e., highest possible returns and fastest possible turnaround time), environmental violations at the refinery can also create problems for the user. The relationship should be thought of as a ‘partnership’. It must be mutually profitable and based upon trust and fair treatment.