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Tech Industry

Where do old computers go to die?

It could be an environmental mess in the making--or a huge opportunity for high-tech junkmen like Eli Freedman to do a good deed and make a buck at the same time.

Eli Freedman makes no bones about it. He's a high-tech junkman and he's proud of the title.

Actually, he's vice president of operations for Hi-Tech Recycling Canada, a computer and electronics recycling outfit based in Toronto. Like a growing number of entrepreneurs, Freedman has been able to develop a lucrative business by helping to clean up what he describes as an environmental mess in the making: the disposal of obsolete computer systems. Indeed, the disposal and recycling of computer products has become an increasingly controversial issue as municipalities concerned about the potential of toxic danger close their landfill sites to dumping.

Hi-Tech Recycling has prospered since its founding in the mid-1980s as a family business. The company got its start in the mid-1980s, recovering precious metals from silver-oxide batteries. When Mexico City was rocked by a huge earthquake the following year, the company was inundated by requests from companies--many of them telecommunication centers--pleading with it to haul away their damaged mainframes.

Here's where luck intervened.

It turns out that prior to 1975, mainframe computer boards were coated heavily with precious metals, making the systems literally worth their weight in pure gold and silver.

The family transferred the business to Toronto in the early 1990s, focusing on the recovery of scrap computer material that nobody knew what to do with.

And so, like many operations of the same sort, Hi-Tech became part of the latest chapter in the computer industry's development: what to do with the mess that's being left behind in the wake of the digital revolution. CNET's recently caught up with Freedman between sledgehammer sessions with the latest shipments of computer junk to wind up in his warehouses.

Q: What's the main issue about the disposal of obsolete computer systems that people need to know about?
A: Public health. The lead from these things can leak into water systems, and the long-term implications obviously aren't healthy. Here in Toronto, the big dump we have is closing within a year. They're looking for mines way up north. But right now, they're dumping in Michigan.

Is there sufficient public awareness about the issue?
It's only become an issue in the last 20 years--what do you do when there are toxic materials like monitors or CPUs with lead that shouldn't be in landfill? Every monitor has four to six pounds of lead. And it's mixed with phosphorous to protect users from radiation.

And municipalities don't want that stuff anywhere near them?
The problem is that when you break that up, it can get into landfill and water. There's already been certain legislation in the U.S.--and there will be in Canada--on where you can put it. But when there is no more landfill, the question is, "What do you do with this stuff?"

Have there been any instances where poisons or toxic elements related to this stuff has gotten into the ground?
We haven't gotten to the point where they've been able to pinpoint blame on manufacturers but it has already become an environmental issue. It's the kind of situation where they're not waiting around for a disaster to happen.

Has this become a big political issue?
In the U.S., you cannot throw monitors into landfill. They're working on it in Canada--and it's all because of issues related to the environment.

What do you do when equipment comes in for recycling?
The company's broken into different divisions for taking care of scrap, computer board and memory recovery, and scrap metal.

So we're talking about a very labor-intensive business?
Yes. This is where high-tech translates into low-tech. When you break down materials like we do, this is a hammer, chisel and screwdriver operation, and you have to take things out piece by piece.

Sounds like the companies should be paying you to haul away their garbage, no?
Well, most of the time we won't charge to remove materials. It's a service. Sometimes the material has scrap value for us. Sometimes it's absolute junk, especially monitors, which we do have to charge for to make sure (they're disposed of properly) because of toxic components.

On the other hand, we've got situations where some materials coming off lease are considered second-tier material and so we'll broker that on a percentage basis. But in most cases, companies are happy to get rid of the material because there's just no other outlet for it.

You'd think they'd be able to go back to the vendor that sold the equipment in the first place and figure out a way to take care of it.
The biggest onus still resides upon the large manufacturers. Hewlett-Packard and IBM, for example, have buyback programs because they don't want materials out there, and they want to avoid seeing it turn up in the gray market. But it's the industry's dirty little secret: What do you do with electronic equipment at the end of its life?

When you break up the machines and see what's salvageable and what's not, is the mix fairly constant?
We send out 30,000 to 40,000 pounds a month in computer boards. But we have to diversify because the computer industry is changing. If we were just to survive on boards, we would be out of business. There are far fewer mainframe components today and therefore less material to pull out. Everything's becoming miniature.

Is there a rhyme or rhythm to this work? For instance, when big technology shifts occur and times are booming in the PC business, retailers can count on getting lots of traffic. Is there something similar which governs the way your business runs?
In this sense: It used to be every 18 months that there was some great breakthrough in the computer industry. Now the cycle is more like nine months. We're living in a consumer society, and more and more companies will upgrade. Nowadays, 700MHz systems are common; a couple of years ago, it was 100MHz.

From your vantage point, what kind of numbers are we talking about? What's the size of the junk market?
In the consumer business, there are probably 30 million to 40 million obsolete computers out there.

Sounds like there's a lot of potential opportunity. How tough is the market?
(Laughing) We have competitors in Ontario. Hopefully there won't be too many more.

How do you decide what to take and refurbish and what to earmark for scrap?
Once it comes in, we sort it out...If there are 286- or 386-based computers, we'll just strip them.

No offense, but basically, you guys are high-tech junkmen?
Absolutely! My grandfather in Detroit had a scrap yard. This is just another avenue of recycling materials that are out there.

Yet it's more than just trading one sort of recycling material for another, 50 years later?
There's a lot to know because of the fact that the business is changing so rapidly. We happen to have a niche in the computer industry, but you've still got to knock on doors and let companies know that you can provide this service for them. Recycling in general is a big business. As they say in "The Sopranos," waste management is a big, big business.