Recyclers challenge Big Steel
Arriving cars and appliances get beaten apart in electricity-driven hammermills, chambers where spinning steel clubs separate glass and plastic from metal in the same way that a flail separates wheat from chaff. The metal that comes out in chunks the size of a volleyball is mostly steel, but includes anything you'd find in a toaster - from chrome and copper to aluminum. Next, hot electrodes convert the purified scrap into a molten steel alloy.
The alloy is generally turned into bar steel, those reinforcing beams used in construction, and because minimills can produce this kind of steel so cheaply, they've pushed out of this market "Big Steel" manufacturers such as Republic and Bethlehem Steel.
Minimill owners are opportunistic. Before building a mill, they look for places with cheap land, plentiful labor, available electricity and access to scrap. That makes rural areas ideal, because, in addition to cheap land, they tend to have more electricity than the population needs. Power companies are happy to sell the excess at a bulk rate. Further, as writer Richard Preston points out in his history, American Steel, farm kids make good steelworkers: They're not afraid of big machinery.
Texas-based Chaparral Steel, the 12th largest steel producer in the United States, processes 550,000 tons of scrap each year. Chaparral says it makes a ton of steel in less than 1.4 man-hours, as compared with an industry average of three to five hours. Chaparral and other pioneers like Nucor Corp. have even edged into sheet steel, the largest market in the country, thanks to the auto industry.
The demand for scrap created by minimill success has allowed Alan Morris to continue the West's mining heritage, so to speak, above-ground.