Why more Nigerians take to scrap metal business

A Lagos-based woman wanted to dispose her family’s disused power generating set and hoped to raise about N10,000 from the item. But when the prospective buyer first offered her N20,000, she knew there was money to be made from the sale, so she quickly raised the asking price. Both parties began a long bargaining process that […]

A Lagos-based woman wanted to dispose her family’s disused power generating set and hoped to raise about N10,000 from the item. But when the prospective buyer first offered her N20,000, she knew there was money to be made from the sale, so she quickly raised the asking price. Both parties began a long bargaining process that ended at a mutually agreed price of N50,000.

Such condemned items, coming under the generic title of scrap metals, are now fast-moving commodities across Nigerian cities and villages. There are many buyers, but foot soldiers in a growing trade birthed or boosted by the rising phenomenon known as energy transition.

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The evolution of electric vehicles is giving rise to the demand for a variety of metals that are used in batteries for these cars, which are responsible for up to 50 per cent of the entire vehicle cost.

A study released in June 2017 by the New York-based International Copper Association (ICA) foresaw a nearly tenfold global increase in demand for copper from the electric vehicle (EV) sector by 2027.

 

Based on research conducted by a United Kingdom-based IDTechEx, the ICA stated, “By 2027, an estimated 27 million EVs will be on the road, up from three million in 2017. This will raise copper demand in EVs from 185,000 metric tons in 2017 to 1.74 million metric tons in 2027.” 

The research also stated that all types of EVs requird a substantial amount of copper. It is used in batteries, windings and copper rotors used in electric motors, wiring, bus-bars,and charging infrastructure, as the demand for electric vehicles is expected to rise.

Those you see pushing their carts and picking up every available disused metal, fan, electric iron, metal scrap, aluminum, vehicle parts, condemned generating sets, and refrigerators, among others, sell and make money from their trade.

The sight of these scavengers who roam the streets, refuse dumps, mechanic workshops, etc, is usually disgusting to some people as many look down on them because their work does not give them prestige in the society. They appear dirty while scavenging for marketable items, which they weigh before selling to make good money.

While they pick some of these items at no cost on the roads, dumpsites etc, they sometimes buy them at minimal amounts but resell them their bosses, who in turn sell directly to recycling companies. These companies melt them and form into different items like rods and pipes, among many other valuables.

Interaction with some of the scavengers shows that many of them, who are uneducated, are ignorant of the opportunities that abound in the industry. As such, they do not understand the reason for the rising demand for some substances like copper, lithium, aluminum, metal etc. Their bosses who deal directly with recycling companies make more money from this.  

Khalid Rabiu, an indigene of Kano State, has been surviving on scavenging business in Lagos for about five years now. He collects scrap metals from different areas and estates around Ikeja. He also has a few customers on Lagos Island, who sometimes call him to come to pick up items, which he buys and resells to get money.

He said although they were being looked down upon by members of the society, they make a lot of money from picking, buying and selling scraps. 

“I recently bought a knocked engine of a car from a customer at N40,000 but in the end, I got close to N20,000 profit because I was able to uncouple the engine and sold the parts separately,” he said.

He also confirmed that he has a boss who buys off the items from him in accordance with their weight.

“I don’t store my items because I do not plan to rent a space for that purchase. This is because the cost of renting a space is expensive in Lagos. So I sell them to my boss as I pick or buy them daily. 

“There are restrictions in some estates as some people hide under the guise of being scavengers to steal from homes. What we do in such cases is to put a call across to buyers who speak with security guards at the exit of such estates,” he explained.

Rabiu said he made between N7,000 to N10,000 profit on a daily basis and even more on exceptional days. 

He, however, said the scavenging work had become very competitive among many youths and old men who now live on the business.

Daily Trust Saturday learnt that because of opportunities in this business, more people are going into it. One of the recent entrants into the business is a 52-year-old Sule Ibrahim, who was into forex trading at Alaba. He decided to switch trade following the Central Bank of Nigeria’s directive that ended forex supplies to bureau de change operators.

He is now a scrap metal dealer at Alaba Rago in Ojo Local Government Area of Lagos. According to him, most weekends are the busiest for those in the business.

Sule, as he prefers to be addressed, said although the scrap business wouldn’t give big profit immediately, unlike what he used to get from forex, he believes that with lots of Chinese, Indians and Lebanese opening up more recycling plants in the metropolis, his daily income may soon rise.

Sule and his younger brother manage heaps of different types of recyclables, made up of rusty irons, plastic bottles, copper and aluminum.

Our correspondent also saw heaps of trash, also referred to as ‘condemned iron’ in a large space in the middle of the road on the way to Okokomaiko. Here, scrap dealers buy and sell cheap rusted iron to welders and those who want burglary proofs for their homes.  

Trade booming in Kaduna

Findings from Kaduna State revealed that the metal scrap business is a major source of income for many families as the commodity is in high demand.

Our correspondent further gathered that the scrap metal collected by scavengers and the likes are melted and transformed into various local items, which include but not limited to cooking stoves, farm implements, local pots and pans, as well as buckets.

When our correspondent visited the famous old Panteka Market located near the Kaduna Central Market, a pick-up loaded with various metals was being offloaded after a business transaction had been completed.

Daily Trust Saturday also observed about five wheelbarrows loaded with different types of scrap metals being dropped for dealers.

Speaking with our correspondent, a scrap dealer and member of the Scrap Dealers Association, Ibrahim Idris, said he had been in the business for over 20 years.

“We buy all kinds of metal: aluminum, iron, zinc, copper, brass and so on. We get them from various means. Some scavengers and other individuals and mechanics bring them to us and we buy.  

“At times we go looking for the iron ourselves. We go to mechanic workshops looking for parts that are no longer useful, such as car engines and other metal parts in a vehicle,” he said.

Asked which metal is in high demand, he said, “There is no metal that is not useful because they are melted and used for various purposes; and through this, we are able to survive and feed our families.” 

He refused to disclose how much he buys the scrap or how much he makes from the business, saying it is a trade secret.  He, however, said the business was very lucrative as he had built his house and is taking care of his family’s needs.

He noted that the demand for the metal had continued to rise due to its importance in many sectors of the economy. He called on the government at all levels to continue to do more to support small businesses like theirs in order to grow the economy.

Another dealer, Abdulrahman Abubakar, who has been in the business for over 30 years, said it had been thriving in the old Panteka Market for over 50 years.

While highlighting the pains and gains of the trade, Abubakar said, “When I started, it was very difficult for me.  I had to learn to carry very heavy metals and walk around for places to get the commodity. I thank God that I endured, and now, it has paid off.”

Also, Adam Usman, who started the trade over a year ago, said he collected any type of condemned metal in his two-wheel cart, which he would sell to a dealer at an agreed price.

He said, “Iron rod is the most demanded metal, but my customers also ask for condemned car engines, motorcycles and the likes.”

Asked how much he sells the metal, he said, “It depends on the type of metal, as every type has its price tag. The weight of the iron is measured, and based on that, a price tag is given. Some are sold at N200 per kilogram.

 

But he could not give an estimate of what he makes, saying, “I get enough to take care of my needs. Every business has its gains and challenges, so I am thankful to God for the little I get from what I am doing.”

He said the trade had been made more credible through their association, adding that t-shirts were distributed to registered members. 

 “In the past, people used to commit crimes hiding under the cover that they were scavengers. This caused a lot of problems for us who are genuinely engaging in the trade.”  

In Kano, it is big business

The metal scrap business has been gathering momentum in Kano city over the past years. It has become one of the trending money-making businesses among the youth.

Most of the youths have, through this business, gone ahead to become employers of labour by diversifying into other businesses.

Most of them operate the scrap metal business within uncompleted buildings in areas like Kofar Dawanau, Kwaciri, Kofar Ruwa, Dawanau, Bachirawa and other places.

Apart from the dealers, there are other groups of people that earn a living through the business. These include the scavengers and middlemen who buy from them and sell to dealers.

A 14-year-old scavenger encountered by our correspondent at a refuse dumpsite in Kano, who simply identified himself as Hassan, said the business had kept him away from street begging, as he gets and sells these materials to middlemen.

He also said that in addition to metals, middlemen ask for plastic items and abandoned cartons.

“What they want the most from us is metal. If you have any metal, then you have money. One kilo is sold at N200 and I hardly get more than one in a day. But for soft drinks, rubber and cartons, we get many, but they buy from us at N70 only,” the teenage boy who was brought to Kano by his parents for Qur’anic education said.

Another young scavenger, Bashir Auwal, said he would go round the metropolis to get metals and other scraps. He would also go to mechanic workshops within the city to get what would earn him a living.

“Sometimes we get items from residents, such as damaged pots, iron rods and other metals. We also go to mechanic workshops to get more. In this business, what we need the most are metals. So far you get metals they (the middlemen) will buy and you will go with your money,” he said.

Middlemen who spoke with our correspondent said the demand for metal scraps had continued to increase over the years as some of them get as many as five tons.

Ahmad Mahi, who owns a scale at an uncompleted building in the Kurna area of Dala Local Government, said copper and brass were the most expensive among the metals, followed by aluminum, then normal metals.

He said brass and copper were normally prized at N2,000 per kilo while aluminum goes for N800 per kilo, and ordinary metals go for N200. He also said Maltina cans and those of other soft drinks were in high demand in the market as they were sold at N500 per kilo. He further explained that such items were used in making pots.

“As far as the middlemen are concerned, we get from 500 kilos and above daily. Whenever we make like three to four tons of metals, we will put everything in a vehicle and send to our dealer, who will also weigh and give us our money.

“One thousand kilos is equal to one ton. That is how we do it. The business is really paying, if not for the scarcity of the needed metals,” he said.

A dealer in one of the popular markets in Kwakwaci, Aliyu Muhammad, also told our correspondent that the most needed among all the metals were thick and strong ones gotten from bulldozers and trailers. According to him, the thickest parts are the most needed, not the body.

“We sell to companies in Kano and Lagos. They need thick metals they dissolve and use to produce iron rods. Sometimes they just dilute them and send abroad through Lagos. 

“The thin ones are also needed but the thick ones are highly priced. Light metals like roofing sheets, bodies of cars and more are also needed. So, whatever type of metal you have will attract sales,” he said.

He also said that as dealers, they sold to different companies in Kano and Lagos. He said they usually sold to Chinese companies in Kano, and sometimes, Indians. He also said they mostly sold thick metals to Chinese companies, while the Indians scout for light ones, as, according to him, they do not have enough machines to process the thick ones.

“We also sell to companies in Lagos, but we have to take it there. We sell to companies like Top Steel, Pond Real, African Steel and more,” he said.

On the rising demand for metals, Aliyu said this mostly occurred when there is contract approval for construction in the country and even abroad.

“Whenever there is high demand for metals in the market, both within and outside the country, the price goes up. The companies themselves will be adding money to dealers. That is how the prices rise. 

“Also, dollar price usually leads to an increase in the prices of the items. Fuel scarcity also adds to rise in the prices. Presently, from here to Lagos for a trailer fully loaded with metals, it is up to N1million, but we used to pay N550,000,” he added.

He said the price of metal had doubled twice this year when compared to what happened last year.

He further said, “Last year, the price was from N100 to N120, but as I speak to you today, the price in Lagos is over N300.

“We make at least two trailers in a day, and each carries 30 tons, which goes for at least N9million. So in a week, we sell metals of at least N18million. But others do more than this while some go below our own.”

Risks and challenges

He said one of the challenges in the business was that sometimes the price of metals would fall while they still had large stocks in their garages. Some people also bring metals that are not theirs and ask them to buy.

“They may have stolen it, especially expensive ones like copper or brass, and in the end you will get involved in police cases and may lose a lot. Also, you may send your metal, thinking that it is up to 1,000 kilograms but they may weigh only 850 kilos,” he said.

Muhammad concluded that dealers, middlemen and even scavengers are making a lot of money from the scrap business.

 

Eugene Agha, Christiana T. Alabi (Lagos), Zahraddeen Yakubu Shuaibu (Kano) & Maryam Ahmadu-Suka (Kaduna)