BlueOak Resources, a startup company backed by some of the biggest names in U.S. venture capital has raised $35 million in project financing to mine precious metals in Arkansas.
BlueOak won’t be strip-mining, open-pit mining, or moving mountains to get at precious metals. Instead the company intends to build mini-refineries that will extract the wealth of gold, silver, copper, and rare earth minerals buried deep in the bowels of the closets, drawers, and bags where the detritus that collects with each new release of the modern world’s latest and greatest gizmos and gadgetry amasses.
In the U.S., consumers alone dispose of some 3.2 million tons of e-waste every year and more than 80% ends up in the trash, contributing to more than 70% of all toxic metals in U.S. landfills. Around the world, only about 13% of e-waste undergoes any kind of recycling, according to a 2009 study from Advanced Technologies Materials Inc. Cities in China, like Guiyu, which is hailed as the international capital of e-waste, receives 4,000 tons of electronic garbage every hour.
For BlueOak, this trash is literally treasure. The company estimates that mining companies spend roughly $12 billion per year searching for virgin ore deposits. While the U.S. throws out one ton of cell phones every 20 minutes, with each ton containing 70 times the amount of gold and silver found in virgin ore. For copper the number is even higher, with the equivalent of roughly one-third of global mining production thrown out in e-waste globally every year.
The company’s first refinery, in Osceola, Ark., is backed by an initial commitment of $35 million from the Arkansas Teachers’ Retirement Fund, a consortium of undisclosed European and U.S. investors and the Arkansas Development Finance Authority. Production at the facility will begin in 2015, with the first factory able to process 15 million pounds of scrap per year.
BlueOak was launched in 2011 by Privahini Bradoo, a former executive at the emissions reduction and fuel production company LanzaTech New Zealand Ltd., and Bryce Goodman, a former analyst for Mitsubishi Corp. who specialized in rare earth minerals. The company raised an initial $7.5 million from Kleiner Perkins Caufield & Byers and Boston-based Terawatt Ventures.
The idea for the company came from watching the development of the scrap-steel recycling business in the U.S. and the advent of mini-mill refining, according to Bradoo. “Fifty or sixty years ago the primary way you made steel was to dig a hole in the ground, extract ore, and smelt it. The mini-mill guys realized you could recover value from scrap steel and set up facilities in some of the most rural parts of America.”
Borrowing from that model, Bradoo envisions the possibility of setting up small refineries for e-waste across the U.S. It’s a vision that’s shared by some of the company’s investment partners, like the Heartland Renaissance Fund, the Los Angeles-based National New Markets Fund, and U.S. Bancorp Community Development Corp., which all provided tax credit financing to help BlueOak raise project finance for the facility.
“The New Markets Tax Credits were created with the vision of empowering and driving positive impact within rural communities in the U.S. and the BlueOak project allows us to do just that in Osceola,” said Sam Walls, the president of the Heartland Renaissance Fund, in a statement.
Photo via Flickr user Sanguto