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Energy & Resources
Copper thefts run rampant
Mineral resource of the month: Nickel


Copper thefts run rampant

Volcanologists monitoring the erupting Mayon volcano in the Philippines are having trouble doing their jobs. Their challenge is an unusual one: theft. Bandits have scaled the volcano’s slopes and stolen copper wiring from the scientists’ equipment.

The copper thefts pose a direct threat to residents, who as a result, may not receive ample evacuation warnings. The threat, however, extends beyond Mayon. Copper wiring thefts of any type carry a high risk of injury or death, says Marilyn Lineberger, a spokesperson for Duke Energy in Charlotte, N.C. And such thievery has risen substantially worldwide over the past year, with Duke Energy seeing a 20 percent increase in copper thefts this year alone, Lineberger says. The company has seen “a handful of significant injuries and fatalities” at their sites, caused primarily by electrocution, as thieves steal copper from electrical wiring.

The problem is pervasive, with theft reports coming from most of the 50 U.S. states, as well as Zambia, England and the Philippines, to name a few. In recent months, for example, copper has been stolen from air conditioning units in warehouses and stores in Georgia, construction sites in West Virginia, schools in Hawaii, and graveyard urns and electricity plants worldwide.

Stealing copper has become more attractive over the past year as copper prices have soared to record highs, says Daniel Edelstein, the copper commodity specialist with the U.S. Geological Survey in Reston, Va. For the last few years, the metal averaged about 80 cents per pound, he says. Today, it is averaging about $3.50 per pound, having dropped from a high in May of more than $4.00 a pound.

The high prices reflect low global supply and high demand, Edelstein says. Prices were depressed for a number of years, he says, which disincentivized investment in new production. The global market relied on excess copper stockpiles for awhile. Producers realized, though, that more production would be needed as the stockpiles ran low. The realization came too late, however, as no one had anticipated the huge spike in China’s demand for the metal, he says. That demand spike plus disruptions in production (including a couple of worker strikes, and weather delays), directly led to tight supplies and the higher prices, he says.

The prices of many metals have risen sharply in recent years, Edelstein says, such as nickel and molybdenum. But they are not as easily recognizable or separable as copper. Both molybdenum and nickel are widely used in steel, but they constitute only a relatively small percentage of the total weight and are thus less attractive to would-be thieves.

Copper, on the other hand, is primarily used as a major constituent of alloys or by itself in electrical wiring or cooling coils in air conditioners, for example, which are readily recognizable and thus easy to steal, Edelstein says. Close to 75 percent of copper is used for its ability to carry a current, with the largest uses being in electrical generation and distribution, and building wiring, he says. That usage makes electric companies, and their unmanned substations, ready targets, Lineberger says.

Thieves are breaking into places where copper piping and wiring is readily available, stealing it and taking it to scrap metal yards to sell it. Scrap yards pay somewhat less than the commodities prices, but thieves can still make $50 to $100 off of the copper in one industrial air conditioner, according to an Aug. 17 article in the Atlanta Journal-Constitution.

Stealing metal and selling it to scrap metal dealers for a profit is not a new problem, says Bryan McGannon, a spokesman for the Institute of Scrap Recycling Industries. Whenever prices for easily recognizable metals are high, thefts seem to spike, he says. For instance, when the price of steel spiked a year or two ago, the industry saw increases in stolen goods, such as construction materials and even manhole covers. And when aluminum spiked earlier this year, so too did thefts of aluminum siding and beer kegs.

The underlying problem, McGannon says, is that legitimate scrap is exceedingly difficult to differentiate from stolen scrap. When someone brings a heap of metal into a scrap yard, he says, scrap dealers usually get identification from the sellers, such as license plate or drivers license numbers, before they pay out. And scrap dealers know certain red flags to look for, he says, such as someone bringing in city manhole covers, or brand-new construction grade copper pipes in the back of a pickup truck. But it is not always that simple, as one-year-old scrap copper is virtually indistinguishable from 10-year-old scrap copper, he says, and it can be difficult to determine if certain types of scrap, such as aluminum siding, were obtained legitimately.

To help prevent the crime, the scrap metal industry has partnered with local law enforcement officials, as well as the National Crime Prevention Council. The industry has also been working with construction companies and electric utilities, McGannon says, suggesting that the companies take extra measures to secure their materials and mark their copper if at all possible.

Despite best efforts, combating the thievery is a big challenge, especially with commodity prices as high as they currently are, McGannon admits. Lineberger says the energy industry has seen some copper theft over the years, but “we’ve not seen anything on this scale before,” and unfortunately, they have not seen any signs of the problem waning.

With the Aug. 31 settlement of a four-week-long strike at the world’s largest copper mine in Chile, though, more copper should be soon back on the market, which could change the price outlook. If the historic cyclical nature of the metals markets is a guide, prices are likely to decrease eventually, Edelstein says, which will likely lead to a decrease in thefts. However, he says, exactly when prices will go down is “questionable.”

Megan Sever

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Mineral resource of the month: Nickel

U.S. Geological Survey mineral commodity specialist Peter H. Kuck has compiled the following information on nickel, a critical constituent in key grades of stainless steel and superalloys.

Together with chromium, nickel makes steel more resistant to corrosion. Stainless steel thus accounts for more than 65 percent of primary nickel consumption in the world. One of the more common grades of stainless steel is Type 304, which contains 18 to 20 percent chromium and 10.5 to 12 percent nickel. Owing to their high corrosion resistance, nickel-bearing stainless steels are widely used in the transportation sector, the energy sector, the food preparation and processing industry, the beverage industry, the pharmaceutical industry and the medical community.

Architects are also increasingly specifying stainless steel for the exterior walls and roofing of public and commercial buildings. Stainless steel is frequently used for decorative indoor paneling, as well as for more traditional railings and plumbing fixtures. The Walt Disney Concert Hall at the new Music Center in downtown Los Angeles, Calif., illustrates how stainless steel can give futuristic buildings a dynamic appearance while reducing long-term maintenance costs.

Nickel has excellent plating properties and is widely used for decorative finishing or engineered coatings. Plating accounts for about 8 percent of world nickel demand. Plastics can be coated as well as base metals. The music industry uses a sophisticated nickel electroforming process to produce compact disc “masters” and “stampers.” A master can make 30 nickel stampers, each of which can produce up to a million polycarbonate CDs.

About one-third of the nickel used in the United States goes into superalloys. Superalloys can survive in many high-temperature environments where most other alloys melt or oxidize. Key uses include jet aircraft engines, industrial gas turbines, and space propulsion systems. High-nickel superalloys are used in critical jet engine parts, such as turbine blades.

Copper is frequently alloyed with nickel to produce cupronickel, an alloy that is less susceptible to saltwater corrosion than pure copper. The first U.S. cupronickel coin, a 3-cent piece, was made in 1865. The coin contained 75 percent copper and 25 percent nickel, a ratio that the U.S. Mint continues to use. The Monels, a family of nickel-copper engineering alloys used in marine engineering and pumping applications, typically contain from 52 to 66 percent nickel. Nickel is also alloyed with titanium to produce Nitinol, a “shape memory” alloy used in eyeglass frames, dentistry and medicine.

The United States has very few economically viable, high-grade nickel deposits and is almost totally dependent on foreign sources for primary nickel. The bulk of the nickel entering the global marketplace comes from Australia, Canada, Cuba, New Caledonia and Russia.

In 2005, at least 22 countries mined nickel ores. World production was about 1.3 million tons of contained nickel. About 39 smelting and refining complexes were in operation.

During the last five years, demand for nickel has frequently outstripped supply, despite the commissioning of several major mines, including the sulfide-rich Raglan and Voisey’s Bay mines in the subarctic of northeastern Canada. Large projects to prepare land for mining are currently under development in Australia, Brazil, Kazakhstan and New Caledonia. The ongoing supply deficit resulted in record high nickel prices during the second quarter of 2006.

Visit minerals.usgs.gov/minerals for more information on nickel.

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