Shredding, Yesterday, Today and Tomorrow Rusmet Las Vegas September 2019

1. Shredding, Yesterday, Today and TomorrowRusmetLas VegasSeptember 2019 Scott Newell Chairman Newell Recycling Equipment LLC

2. Yesterday I am proud that my father, Alton Scott Newell Sr. invented the modern shredding machine, which we started operating in 1961 in San Antonio, Texas. During 1962 my father helped me to build the 2nd Newell shredding machine at the Newell Recycling scrap plant I was managing in Phoenix, Arizona. We then added 3 more shredders, one to El Paso, Austin, and Dallas, Texas.

3. US PATENT # 3482788 AInventor Alton Newell Filed 1965 Granted 1969

4. The First Newell Shredder that was wide able to shred a compete auto body.

5. The Newell scrap yards were successful and other friends in the business came to us and asked us to build a machine for them. Lindemann, who at the time were the world’s largest manufacturers of scrap processing equipment came to us and asked for a license to build according to our patents. We did enter an agreement with Lindemann that lasted for more than 17 years, then we sold to Lindemann the right to use our information into the future while we began to compete with them. • As a result, we began to sell shredding plants all around the world and by the 1990’s Newell was responsible for almost all of shredders that could process an automobile.

6. The Introduction of the Auto Shredder Changed the Recycling Industry around the World. • In 1994, The American Society of Mechanical Engineers, designated the Newell Shredder as a the 111th National Historic Mechanical Engineering Landmark. • This award is given to inventions and developments that change an industry. “An ASME Landmark represents a progressive step in the evolution of mechanical engineering.”

10. Today • I am fond of telling people that now that I have been doing this for more than 50 years and during that time I have learned a lot…… of things to not do. I have also learned a lot of things to do. • The modern Newell shredder is the product of this evolutionary process. The next machine always did away with some of the things that did not work and it always includes more of the things that do work. • Over 50 years that leads to a lot of evolutionary improvements.

11. The modern Newell shredder

12. Modern shredder plants feature: • Very heavy duty designs that allow the machine so shred heavy scrap in addition to automotive scrap • Computer control systems which we call SSS (smart shredding systems) that operate the machine much more efficiently than any human. • Sophisticated separation systems that produce: • High purity shredded steel scrap • Very valuable co-products of nonferrous metals ranging in size from large pieces to micro fine (less than 3 mm) pieces of Aluminum, Copper and Stainless steel • ASR which contains very little metal of any kind.

13. Today, in the world according to my son, Scott Newell III, who is president of NRE and also chairman of the BIR shredder committee, there are 914 shredding plants (although some of them have not been running during the past few years because of market conditions. But we are seeing more and more of them restarting). • Two years ago at this meeting, I boldly predicted that the 850 shredder in operation at that time would double and more to approach 2000 shredding plants in the world. • The basis of that prediction was that in America we shred about 40% of all of the scrap while in most of the rest of the developed world, less than 20% of the shreddable scrap is shredded.

14. In developing countries, the percentage that is presently being shredded is very low but will increase with economic growth. • My reasoning is that as the world realizes the “true value of shredded scrap” higher and higher percentages of that scrap will be shredded. • Also, I believe that the realization that having cheap labor to dismantle scrap and to bale or shear it does not capture the value of the nonferrous metals and it does not add the value of having shredded scrap go into the EAF. • Last year I made a presentation regarding the true value in use of shredded scrap. • The next series of slides are from that presentation and explain very clearly advantages of shredded scrap.

15. Don’t measure scrap cost going into the furnace!

16. Measure the cost of the molten metal in the ladle to determine “value in use”.

17. “Value in Use” means that the cost for the scrap should not be measured by the cost per ton of scrap going into the furnace but rather by the cost per ton of the molten steel being poured from the furnace. We believe that the value in use of shredded steel scrap produces the lowest cost per ton for the steel being produce. This is the primary marketing tool available to shredded scrap sellers. It seems to be working as steel mills around the world in the free market value shredded scrap above other types of premium scrap.

18. The following Series of Slides were provided by Andreas Albuja, the manager of ADELCA steel mill, located in Quito Ecuador. I think that in another life, Andreas would have been a university professor as he is very capable of collecting and explaining complicated data very clearly. This is the most important real data that I have ever been able to find that accurately explains “Value in Use” for shredded scrap in EAF operations.

19. Meltshop ADELCA`S SUCCESS • I want to present some conclusions regarding the use of shredder scrap as the main source for steel production. THE COMPANY • ADELCA is the most important Ecuadorian Steel maker placed near Quito, Ecuador, South America. • Currently producing 300.000 tpy of rebar and small shapes. Besides, it has a cold drawing plant for 60.000 tpy of all type of wire products. THE MELTSHOP • In 2006, Adelca signed with Sider Engineneering (Udine-Italy) the 160.000 tpy meltshop and started up on July,2008

20. Meltshop • As every new participant, Adelca began operation focused in the figures related with the process, but not in the scrap (60% of total cost) THE ECUADORIAN SCRAP

21. Meltshop ADELCA`S MIX PRESSED&SHEAR AND BUNDLE SCRAP

22. Meltshop SCRAP MIX • Low density. • Dirty scrap.

23. Meltshop THE NEW SCRAP MIX • High density. • Clean scrap.

24. Meltshop THE NEW Operation

25. Adelca calculate that the use of shredded scrap has saved $35 to $40 in direct costs per billet ton of material produced. • In addition to the direct cost savings, Adelca increased monthly tons of production by almost 100%. The effect of this increase of production is a huge increase in the return on investment of money, time and energy. • It is almost like buying a new melting facility to double capacity for no investment cost and saving $40 per ton on melting at the same time.

26. Tomorrow • There is a movement to using all of the evolved quality shredder equipment as portable or mobile shredding plants. This allows for a plant to be set up for much lower investment and it can always be moved should the economic conditions guide the plant to a new location. • We see these plants as fitting a niche market place where it is possible to make good profits on much lower tons per month of production. • The niche is identified as being a location where scrap is available but that the freight rates for unprepared scrap to the next consumer of such scrap is high enough to allow the niche operator to prosper.

27. This is a complete portable shredder with 1600 HP that is able to process around 30 tons per hour with a minimum investment.

28. This is a transportable shredder that can accept a complete automobile and comes with 2200 HP and can produce more than 40 tons per hour.

29. 8085 Newell Transportable This shredder is transportable in that it does not require foundations and can be disassembled and transported to another location and reassembled. These mobile and portable shredders are all based on all of the evolutionary features as fixed installation machines but at much lower costs.

30. Future shredding will always utilize modern and smarter nonferrous metal value recoveries. For fixed plants these investments can exceed the investment for the shredder but they produce recoveries of up to $100 for each ton of steel scrap shredded. • The math is simple, each 100 tons of shredded scrap produced can yield $10,000 worth of value in nonferrous recovery.

31. PMRP means portable metal recover plant. Although this is a concept drawing, this equipment is actually in service. The PMRP is not as sophisticated as the modern fixed position plants but they still recover significant values in nonferrous metals. Portable Metal Recovery Plant (MRP) Concept LCH 16/NOV/11 (R00)

32. As I have spent almost all of my life producing shredded scrap, I like to end presentation with this photo. Shredded scrap moving into a stockpile is a beautiful sight to me. I hope that it will become beautiful to you also.

33. Thank you for allowing this presentation. It is an honor to have been invited and I appreciate the opportunity of sharing this information. • If you are interested in a flash drive with this presentation please email to me and we will send one to you or we will make this available to down load to your computer over the Internet. Scott Newell Chairman Newell Recycling Equipment, LLC ScottNewell@NewellEquip.com