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Japan’s urban mining boom picks up as gold prices rise

With gold surging in price, efforts to extract the precious metal from used circuit boards and other electronic waste are ramping up in Japan.

Japan has little in the way of natural resources. But it is considered one of the most promising markets for urban mining: turning discarded electronics into a source of gold as well as of other important metals, such as those used in electric vehicles.

One factory in the city of Hiratsuka, near Yokohama, receives piles of circuit boards and jewelry each day. The scrap is melted down for gold and other metals, which are then shaped into bullion and other forms.

Around 3,000 tonnes of materials are recovered annually at the facility, run by Tanaka Kikinzoku Kogyo.

“We want to expand waste collection not just in Japan, but also in ASEAN, where demand for electronic recycling is expected to grow,” said Akio Nagaoka, who heads the facility.

Gold is a safe-haven asset, and its price has surged as geopolitical risks heightened in the Middle East. Benchmark New York futures reached a roughly five-and-a-half-month high of $2,019 per troy ounce at one point on Oct. 27. Prices in Japan are at record highs.

As prices have risen, so has demand for recycling the metal. Global supply of recycled gold increased roughly 10% on the year in the January-September period to 923.7 tonnes, according to the World Gold Council, outpacing the roughly 3% growth in supply from mine production.

The recycled supply for the full year is seen approaching the 1,293.1 tonnes of 2020 — the highest figure of the past decade.

Recycled gold now makes up under 30% of the global supply. Only around 200,000 tonnes of gold — enough to fill four 50-meter pools — have been mined throughout history, according to the WGC. With output from mines stagnating, recovering the yellow metal from old smartphones, appliances and other scrap is becoming more important than ever.

Some businesses are expanding their capacity to collect and process such waste with an eye on growing demand. Mitsubishi Materials aims to be able to process 240,000 tonnes of scrap a year by the end of fiscal 2030, compared with around 160,000 tonnes now.

Japan’s Sustainability Design Institute estimates there is around 5,300 tonnes of accumulated gold in Japan — equivalent to around 10% of global reserves. Around 280 grams of gold can be recovered from 1 tonne of, or around 10,000, mobile phones, according to Japan’s Environment Ministry, making the process 56 times as efficient in terms of weight than mining new gold.

The Japanese government is rushing to promote recycling not only of gold, but also of other important metals, such as those used in EVs, as a way to bolster its economic security.

In August, Japan agreed to establish a joint framework with ASEAN on resource recycling. It is pursuing greater international cooperation to ensure a stable supply of key minerals, many of which can only be mined in a small number of countries, like China.

There have also been moves to limit exports of e-waste. Basel Convention amendments taking effect in 2025 broaden restrictions on shipments of used circuit boards and more.