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Russia: Scrap Metal Turns To Gold

St. Petersburg, Russia, 22 October 1997 (RFE/RL) -- These days in St. Petersburg -- as elsewhere in Russia -- junk collectors are practicing a kind of crooked alchemy. They're turning scrap metal into gold.

In Soviet times, collecting recyclable scrap metal was an activity reserved primarily for the Pioneers -- the Communist Party's obligatory organization for young children. Now, however, scrap metal recycling has become a serious business, and is no longer child's play. For some it is a way to survive, and for others, a path to riches.

The most lucrative materials are non-ferrous metals -- copper, aluminum, stainless steel, and brass.

Some people collect these metals legally, by combing garbage dumps and other sources of scrap. Others are systematically stealing electric cables, railroad equipment and even whole telecommunication towers.

One industrious scavenger is a tram line employee, earning about $200 a month. He collects scrap metal in his free time, by searching dumpsters. Several times a week he brings his finds to one of about 40 non-ferrous metal reception centers in the city. Copper fetches $1.2 a kilogram, stainless steel 60 cents, brass 60 cents, and aluminum still less. A typical recycling client, this man told our correspondent that he collects up to 8 dollars and 50 cents a day. As he put it: "Before we did not have to do this, but now it is necessary to do this in order to survive."

Vladimir Pilak, head of manufacturing at Lentransgaz, northwest Russia's subsidiary of Gazprom, says the problem of metal theft has become so universal it's treated as a normal part of doing business. Pilak told our correspondent that Lentransgaz recorded 38 large-scale thefts worth the equivalent of $136,000 during 1996. In the first nine months of this year, he said, there were 27 major thefts worth $58,000.

Officials at the October Railroad, northwest Russia's main rail line, say the problem transcends economics. It's become a serious safety issue. Leonid Novikov, a public relations official at the October Railroad, told our correspondent that the problem has been growing since for-profit recycling points appeared in the early 1990s. He said people will steal anything that contains non-ferrous metals, for example, switching and signaling equipment. He said a serious accident is likely to result.

Recycling points resell the metal they get to metal working factories, or to exporters. A report in Delovoi Petersburg, a business newspaper, estimated that non-ferrous metal recycling in St. Petersburg is a 10-million-dollar-a-month business. Estimates on just how many people scavenge scrap metal go as high as 200,000.

In July, St. Petersburg city Governor Vladimir Yakovlev issued a decree shutting down the non-ferrous scrap metal receiving centers. The companies responded with a wave of protest, and filed suit. A city court overturned the decree.