Metals – A highly circular industry

How can the metals sector advance circularity while navigating rising demand, resource scarcity and geopolitical pressure?

In this panel from the Circular Valley Forum 2025, industry and policy leaders discuss the opportunities and constraints of creating a more circular metals system. The speakers include Inge Hofkens, COO at Aurubis, Dr. Heike Denecke-Arnold, CEO of Salzgitter Flachstahl, Bruno Pelli from Vale in Brazil, Dr. Ing. Paul Mählitz from the German Mineral Resources Agency (DERA) and Dr. Matthias Koehler, Deputy Director General for Raw Material Policy, Circular Economy and Resource Protection at the German Federal Ministry for Economic Affairs and Climate Action.

The panel explores recycling limits, alloying element recovery, the role of scrap in decarbonisation, and how global market dynamics shape European resource strategies.

This episode is part of our series in collaboration with Circular Valley and features sessions recorded at the Circular Valley Forum 2025.

Video Impression

People

Inge Hofkens, COO Aurubis.
https://www.linkedin.com/in/ingehofkens/

Dr. Heike Denecke-Arnold, CEO Salzgitter Flachstah.
https://www.linkedin.com/in/dr-heike-denecke-arnold/

Bruno Pelli, VALE, Brazil.
https://www.linkedin.com/in/brunopelli/

Dr. Ing. Paul Mählitz, DERA.
https://www.linkedin.com/in/pmhltz/

Dr. Matthias Koehler, Deputy Director General – Raw Material Policy, Circular Economy, Resource Protection, BMWK.
https://www.linkedin.com/in/matthias-koehler-1a36b0122/

Chapters

00:00 Introduction and Panel Welcome
04:42 Steel’s Green Transformation
07:58 Copper Recycling: Rates, Barriers and Energy
13:37 Alloying Elements and Critical Raw Materials
19:26 Germany’s Urban Mine Potential
21:43 Raw Materials as Strategic Security
28:19 Vale’s Circular Business from Brazil
32:17 Closing Reflections

About

Circular Valley is a European hub for circular economy innovation, bringing together international startups, industry, science and policymakers to accelerate the shift toward circular value creation. It is based in Wuppertal, one of Europe’s most dynamic economic regions, and supports cross-sector collaboration to close material loops, advance enabling policy and increase public understanding of circular solutions.

Further Links

https://circular-valley.org

Transcript

[00:00:00] Introduction and Panel Welcome

Inge Hofkens: To really get to these higher recycling rates, we need more material to get collected. There is also a lot of potential collected that is going out of Europe.

Patrick Hypscher: My name is Patrick Hypscher and this is Circularity FM, the podcast about understanding, building and managing circular business models. Welcome back to Circularity.fm. Today we continue our series in collaboration with Circular Valley, where we share three panel conversations from the last Circular Valley Forum in November 2025. Circular Valley is a European hub for circular economy innovation. It brings together startups, industry policymakers and researchers to work on practical innovations for a circular future. In this second episode, you will hear a panel on metals, a highly circular industry. The panel is moderated by Professor Jan Grossarth from the University of Biberach.

Prof. Jan Grossarth: would like you to come to the stage. First, Heike Denecke-Arnold responsible for that film as well indirectly as the CEO of Salzgitter Flachstahl. Welcome, Heike, and as CEO of Salzgitter Flachstahl and a very experienced professional PhD in metallurgy, for example, dealing with steel recovery and all those topics for decades, say for two decades, a little more than that. Salzgitter Flachstahl is a key subsidiary of Salzgitter AG that is a leading producer of flat steel in the European Union based in Kassel, in Salzgitter. ⁓ Why not Salzgitter? That makes sense. I think you can sit down if you like to and I’m going to ask the questions later and welcome all of you to the stage. Inge Hofkens. don’t look like Inge Hofkens, but Inge Höfgen is responsible as the chief operating officer at Aurubis Hello, that is ⁓ a leading global producer of non-ferrous metals and one of the world’s largest recyclers of copper as well. Now all of you are here. ⁓ Bruno, our guest from Brazil, welcome Bruno. Bruno Pelli represents one of the largest mining companies of Brazil. We will ask you later why are you interested in being here. Welcome you very much and as a representative of the federal ministry of ⁓ Economic Affairs from Berlin, Dr. Matthias Köhler is here as an expert for Raw Material Policy. And I think myself, I did not introduce myself, I’m just the moderator today. As we do not have plenty of time for those highly complex issues, we could speak about, I think we just focus on some points and we get some insights of what are you doing ⁓ dealing with circular economy in metals. Dr. Denecke-Arnold, I would like to ask you first. ⁓ Steelmaking, as we heard, is ⁓ for decades dependent on scrap use. That is a kind of circular economy. ⁓ In the film we saw that you are making major investments also. We did not see it directly, but we get some impressions that very old facilities stand in neighborhoods to very new ones, and that looks like major investments in circularity. Which material cycles are you looking to improve or close even further in future?

[00:04:42] Steel’s Green Transformation

Dr. Heike Denecke-Arnold: So, before answering your question, would like to explain what you have seen in the film. You have seen our big construction site where we replace one of our blast furnaces into a direct reduction plant and an electric arc furnace. By doing so, we replace coal in the blast furnace and use in future green hydrogen to reduce the iron ore which is coming from the mines. And then ⁓ the melting process is done in an electric arc furnace where we use then green electricity to get the solid iron liquefied. And so we reduce CO2 emissions. And nowadays, we already use scrap in our process. But by transforming the blast furnace process to an electric arc furnace, we are able to use more scrap. ⁓ in our processes. The steel industry itself is a good recycler for decades. We recycle everything, dust, sludges, water, slags, and when you ask me on which ⁓ loops we are focusing on, this is in the moment especially our slags which are resulting from the process. For example, nowadays the slag from the blast furnace is a high-value secondary material for the cement industry. And so we are working on projects to make sure that the slags which are coming in future from the electric arc furnace, that we can also use it for the cement industry and first trials which we have done are very promising.

Prof. Jan Grossarth: Thank you. Not all of us, as I expect, are experts for the sector we are speaking about. Can you give us a kind of impression about the percentage of the share of recycled or ⁓ scrap used in the steel production? that 5 % or 30 or 90?

Dr. Heike Denecke-Arnold: So nowadays in an integrated steel mill it’s roughly 20 % per ton of steel which is of scrap. When you talk about electric arc furnace processes which are already existing in Germany, they can be run by 100 % of scrap.

Prof. Jan Grossarth: The following question is to you, Inge Hofkens. As you see, we speak about the mass materials now, not the rare earth topics that is very much in the news media outlets nowadays. ⁓ let’s think about three materials that is steel. aluminium and copper. Copper is your profession. What further opportunities ⁓ do you see and which hurdles must be addressed to raise the recycling rates of major metals like steel and also copper while maintaining the material quality and preventing downcycling, what de facto happens in many cases.

[00:07:58] Copper Recycling: Rates, Barriers and Energy

Inge Hofkens: Thank you very much for the question. For those that do not know, ⁓ we are a multi-metal producer, primarily producing copper. We have a network of different sites. Two are represented here also. One we have in Luenen and two we have in Belgium, in Flanders, in Oelen and in Beers. ⁓ Super happy that you’re joining here. By the way, if you want to know more, then please reach out to my colleagues. ⁓ With that, if you look at where we are active, mainly Europe, and I said mainly Europe, we are also building and operating since September a plant also in the US, purely in the area and the field of recycling. What is super exciting actually to be here, because being right here in the spot of North Rhine-Westphal and Flanders, if you take our sides together, then we are the top of the world when it comes down to copper recycling, and that makes me truly proud. That is also something that ⁓ we very much ⁓ tap into. So we have a lot of invest going on in that one. have also ⁓ last year opened two new activities ⁓ in the Belgium sites, all for the recovery of everything that likes copper and that is liking copper from a chemical perspective, like tin and nickel units, which we recover at the best. So for us, copper. Yes, it’s the mass product, say, but there is about 19 other metals that we recover alongside. It’s not rare earth metals, but it’s also some other critical metals that are relevant for today’s life. Now, when you ask ⁓ about ⁓ what does it mean in recycling, ⁓ very simple terms, globally about 30 million tons of copper is being demanded. One third is coming purely from recycled ⁓ materials. Can that be more? Yes or no? That is a different question. I’ll come to that one in a second. If you bring it down to Europe, ⁓ ratio would rise in the direction of 50 % because there is a lot of copper that is going back immediately into the chain. So you have a cable produced, for instance, that cable. The copper in the cable, you can remove the plastics. You keep the cable. that material can be directly used again without any further or a lot of further other treatment. So it depends a bit on which kind of materials we are talking about. So in Europe higher, when you reflect it on our activities, we have about 44 % of copper recycled in our ⁓ copper product that we bring out, which is lower than the so-called 50%, but that’s also because we bring also a lot of primary materials still. Why is that? ⁓ the demand for copper can just not be met only ⁓ by recycling. There is way too much of copper needed for the transition that we are currently in, for energy transition, for digitalization, automation, whatever we do in modern life. So the demand for copper is huge. And that is exactly where we have our biggest challenge, because the copper demand is not only here in Europe, it’s everywhere, primarily in China. but also India is upcoming and that makes that as copper is a globally traded commodity that we have ⁓ a price to compete against and that is setting the boundaries for recovery and for recycling as well. That means for us that ⁓ in order to enable us to continue what we are doing that we need a very good framework of stable energy and available energy and also competitive energy prices because that is really the biggest lever I think where we are struggling. This is not only the case for primary ⁓ processing, but it’s also the case for recycling. So definitely energy number one. And if for our political ⁓ guests here around, we really need to work in Europe on an energy union to enable Europe to function and to get this competition right. The second one is… The second one ⁓ is ⁓ everything that comes down to free-floating of material across member states. And there, definitely, we do have a lot of administrative burden when it comes to notification of transboundary border shipments of raw materials going from one member state to the other. It’s more difficult to get material from one state in Europe to another one than to ship out printed circuit boards to Japan. or other countries. And that is really a pity because if we can keep the materials that are actually being collected here also, ⁓ here where we can recover them in a very good and sustainable way, then that we can also bring back to the supply chain. So that’s the second one. ⁓ And the third one, coming back to your question for recycling rates, copper is one that is really easy, quote unquote, when it comes down to recycling because it never loses ⁓ its properties of quality, which is really great. However, to really get to these higher recycling rates, we need more material to get collected. We still have potential there. There is already a huge collection ⁓ proportion, but there is also a lot of potential collected that is going out of Europe.

[00:13:37] Alloying Elements and Critical Raw Materials

Prof. Jan Grossarth: Thank you very much. think many of the key issues, speaking about metal recovery, can be observed in the case of copper. For example, scarcity. The perspectives are that this static reserves are estimated to contain for 40 years or 50 years globally. So recycling is… ⁓ is very important in that particular case because of scarcity perspectives. Paul Mählitz, I don’t know why, but please excuse that I forget to introduce you now. I’ll introduce you, Paul, welcome. ⁓ Paul Mählitz, he’s responsible at the German Minerals Resource Agency that is a ⁓ competence center for securing the supply of mineral raw materials for the economy. ⁓ Paul, ⁓ for example, ⁓ an example of down cycling in the metals industry would be the recycling of metals and reuse as a reinforcement steel for the construction industry, for example. ⁓ So that is ⁓ reasoned by the use of alloying elements. ⁓ So, let us speak about alloying elements. Beyond the large material streams of steel and copper, many alloying elements, dozens of them, are needed to produce high quality materials. Is there a risk that some of these alloying elements could become scarce in the future, like copper in 40 or 50 years? And should we aim to recover them, also them, more systematically?

Dr. Ing. Paul Mählitz: Thank you. Also for the question, ⁓ yeah, for sure, we are the competence center for raw materials. ⁓ We are a federal institute and ⁓ we collect and provide information on raw materials. And ⁓ besides the mass metals, alloying metals, ⁓ they are, of course, of interest. ⁓ just to, now I have to cheat on my paper here because it’s a… It’s tricky to remember all of them, but just to list some of the alloying elements, vanadium, niobium, tungsten, molybdenum, chromium, nickel, manganese, cobalt, PGMs, of heffanium, niobium, tin, et et cetera. And lots of them, they are already listed on the list of critical raw materials from the EU. And ⁓ this list is highlighting metals or elements, materials that are… we have a supply risk. And if we ⁓ just see what scarcity means, on the one side it’s global availability, and for most of them there’s enough. The second one is market concentration, and there we have in the value chain, after the mining, we have one big player that holds more than 50 % of the ⁓ further treatment. to in this value chain so there is a concentration clearly ⁓ and we also have to to consider the geopolitical risk and ⁓ What comes here to the circular really? ⁓ Context the technical recyclability and if we see them the mass metals that we can also consider as carrier metals for alloying elements, then we also have to consider if we ⁓ If we change the ways how we treat or deal with the metals in the context of transformation. ⁓ Ms. Denecke-Arnold mentioned that the two routes of steel, for example, we have the BOF, the plus oxygen furnace on one side, where we can add 20 % steel as cooling ⁓ agent. But if we increase this, cooling means also that the molten metal will be solid. So there is a thermodynamic limit to it. the share of recycled content And on the other side, we have the big chance with the electric arc furnace to have 100 % recycled materials. And you just mentioned the construction side, the quality that goes more in the past, maybe lower quality. That’s really an issue of pre-sorting material streams. If we put 100 % into one ⁓ big vessel, then what goes in also comes out. And we have thermodynamics and we have to consider where the alloying elements go to. in the electric arc furnace, of them, for example, vanadium ⁓ listed as critical raw materials stays mostly in the metal phase, I come to an end. And some of that goes to the slag. And we also always have to consider the thermodynamics also If we treat them, where does the alloying elements go to and what happens with the streams? The stream, the material that we sell? Or is it a byproduct that we also have to consider to be used or to be useful? those are parameters that are of explicit relevance if we consider that those alloying elements are scarce or they are valuable.

[00:19:26] Germany’s Urban Mine Potential

Prof. Jan Grossarth: Thank you. And ⁓ as we all ⁓ perceive now, one could speak about material sciences and all the details in that panel. ⁓ maybe, ⁓ like, the devil can be found in the details, or is that an English expression? don’t know. ⁓ So the alloying elements, very crucial topic for a ⁓ circular economy in ⁓ metals. Another question, it is about the the built environment in the European Union. ⁓ We are speaking about the urban mine. ⁓ Paul, can you give us an idea about the economic potential of the raw material sources in Europe, in Germany particularly?

Dr. Ing. Paul Mählitz: We are actually doing the task to map the recycling industry in Germany. And for 11 metals, we map the capacities to treat them. And if we consider for the raw material supply, there is no mining in Germany. So we are reliant on the import. And if we consider those 11 elements to be worth roughly 90 billion euro to be imported. We ⁓ estimated the share of secondary raw materials to be roughly 36 billion. So roughly one third is already supplied by ⁓ secondary raw material supply, just to give one house number.

Prof. Jan Grossarth: Thank you very much. Now we switch to governance. ⁓ Dr. Matthias Köhler, ⁓ my first question to you is about who is knocking on your door currently. Let’s ⁓ have a look at industry leaders at companies. Is scarcity in the mass metal production, not the rare earth, but the mass metal production an issue that prompts companies to approach you?

[00:21:43] Raw Materials as Strategic Security

Dr. Matthias Koehler: ⁓ Well, I think the overall assessment at the moment is that we all see clearly that raw materials is a strategic issue. ⁓ Of course, the big shock is the action of China on rare earth in springtime and also in autumn. And this is where a lot of pressure comes from and companies also around here. who are dependent on permanent magnets, ⁓ rare earth products, know what I’m talking about because it is a real threat because our dependency has grown so strong. We really rely on China here that ⁓ this is a real, well, changer the way we look at it. I would say this sets the tone because we start to reflect also on other. raw materials, also other metals that seem available at the moment, but what happens here can happen over time also in other fields. So what happens at the level of the federal government? I think there’s a real shift going on at the moment. There’s a national security council that has been formed under this government, and it has now… ⁓ asked us as Ministry of Economics to develop an action plan on raw materials. And of course this means that we have to change gear on many topics, be it finance, where we always had the untied loan program. We are now starting to give equity into projects, which is really new and a real challenge also for us as administration. but it goes all along, of course, also to circular ⁓ economy, which has to be part of this strategic approach. My feeling is that also with the companies I’m talking to, we have to reflect this in a different way, because until now, or until lately, we had the perspective there is the open world market where you could find everything. But this is no longer true. We’ve seen it with energy, the change, the aggression of Russia, and now we see it with China, also in reaction of the US, and I see a lot of movement here towards more protectionism. Also, special envoy in the G7 context, and I was with the minister at the G7 energy meeting in Toronto, and clearly the Americans will… will work hard to talk about price floors And this is about tariffs finally, and this will fire back also on our companies, because my feeling is that the Americans will not only ⁓ act for their own community, but they will also be critical towards those who go on sourcing in China as before. So we are going to have a difficult ⁓ period ahead of us and that is why it’s so important to have a strategic approach to the whole topic, be it on rare earth or also other metals like copper.

Prof. Jan Grossarth: Okay, as I understand you, companies cannot rely on markets, on world markets of resources only as they experienced in the last decades. So the relationship of state and companies changed somehow. Very concretely, what countermeasures… ⁓ Are you as part of the federal government? Are you taking as a ministry? You can also give us some impressions about cooperation with the European Union, for example.

Dr. Matthias Koehler: I think the key word here is diversification. That’s key. We will not change our dependency on China overnight. That’s not possible. Because they have acted strategically on this over the last two decades. Japan got the shock already in 2010. They changed their policy there. They started to invest heavily on certain metals in Australia, for instance. And so this is one track, but I think other tracks are all issues discussed here on circular ⁓ issues like recycling. And it’s very interesting to see that China defines recycling and circular economy as a strategic question now, very openly. So they are looking at us at a role model first. But I know that all my colleagues at the environmental ministry say, super, now they’ve understood it. But hey, this is not so easy. Because my feeling is, if the Chinese act on this, means it’s a matter of competition. So we have to be, and it was said often today, we have to be quick. We have to develop this idea of circular economy, also recycling, in a really strategic sense.

Prof. Jan Grossarth: Thank you. By the way, has a very long tradition in circular thinking and circular practices, also in agriculture and production systems of food and fiber. ⁓ But maybe also Brazil. Bruno Pelli, very welcome here. had the longest journey of all and it’s very nice to have you here as a guest, as a panelist ⁓ today. ⁓ Vale is one of the world’s leading mining companies as well. ⁓ More addicted more or less to a linear economy I would say, but also very innovative. What is your interest as a company or your personal interest being here in circularity in the circular valley ⁓ forum and what expertise or practices could you bring from Brazil to help Europe? close the material loops more effectively in future.

[00:28:19] Vale’s Circular Business from Brazil

Bruno Pelli: First of all, thank you for the question and thank you for the warm welcome. It’s a huge pleasure to be with all of you. ⁓ First of all, all of us, need to decarbonize industries and the world. And I think it’s not by coincidence that we two are sitting together. So, and iron ore is 8 % of the carbon emitted worldwide. And circularity appeared to valley. as a major step to help the world to decarbonize. For sure scrap is one of the things that goes into steel to help the carbonization, but another way of doing it is producing high quality iron ore for direct reduction coming from high quality mines that are quite scarce, but also from circularity. And that’s where we as Vale invested quite heavily, more than a billion dollars over the last ⁓ years to build a circular business. ⁓ We moved our linear production, part of it to be circular, so last year we delivered 4%. 12.7 million tons of iron ore via circular means. This year we are surpassing 20 million tons. ⁓ What’s equivalent to European iron ore production? So just via circular means. And these iron ore coming from circular sources either waste or tailings is very low carbon in its nature. So that’s a quite good way of helping the world to decarbonize and that’s what we are doing in terms of delivering different products. Also, our waste streams are all mapped. that’s taking care of what we do at home. Basically, we are generating sand as byproducts so we became the largest sand producer in Brazil. We are also developing a green cement. coming from iron ore or tailings, also fertilizers, so just tackling the whole value chain and bringing circular products to society. What we can learn together, and I think it’s how to convert linear business into circular ones. That’s a challenge not just for Vali, not just for Brazil, but it’s a global challenge that we need to tackle. And just bringing that to a geopolitical space, as some of my colleagues started touching, ⁓ the more circular we could be, the more we control value streams and mining and metals production. So I think all of us, have been in resource-rich countries, selling resources to resource consumption countries, where a lot of stockpile of materials, they are now. So can we help? using our technologies to reprocess either tailings or waste or materials that are in European societies or other consuming societies, high-consuming societies to become new products. That’s where I think collaboration will naturally appear. And the big problem for that is that all of us, say that minerals are strategic. But the next question we ask, where is the business case? And several times there is no business case. There is no positive business case. ⁓ And if it’s strategic, we should discuss mineral security. And then we will do as the Chinese have been doing for the last decades, not years. Investing and not asking, where is the business case? But where is the mineral? What do I need? how I build strong value chains to control important minerals. That’s the proper question to be asked, but that’s what I want to add.

[00:32:17] Closing Reflections

Prof. Jan Grossarth: Thank you very much also for mentioning the CO2 issue. think we had a look at Brazil a week before ⁓ because of the CO2. ⁓ So thank you very much and I would ask a final question. Heike, maybe you would like to answer or someone else, but I will ask you first. ⁓ Also as a bridge to the next panel that will focus the chemical industry, think, or one of the next, yeah, the chemical industry. When we think about other materials that can be recovered by the metal industries, for example, like polymers, does that matter? Are there other opportunities to recover side streams from other material worlds, like polymers, more of them?

Dr. Heike Denecke-Arnold: Not really. It’s not a good material if you want to produce steel and also to the ⁓ thermodynamic conditions and firmnesses when you then use ⁓ polymers. Now, it’s not a desired input material for our processes.

Prof. Jan Grossarth: Okay, but then that is the bridge to the next panel, to the chemical industry. Just information for all of you who are here the first time. In the first floor there is a quite significant artwork. It shows the mining in the early Wuppertal. early 19th century and it shows the ancient godnesses do some mining there. It is very, very worth to see it. So thank you very much, all of you panelists, for giving us insights in the very diverse issues that matter on the way to a more circular metal industry. Thank you very much and I’m looking forward to the future panels. Thank you for listening and have a nice day. See you later.

Patrick Hypscher: Thank you for listening to this episode on Circularity FM. This conversation is part of our series in collaboration with Circular Valley, featuring three sessions from the Circular Valley Forum November 2025. If you like this series, leave Circularity FM a review on your preferred podcast platform. Let’s drive a profitable circular economy. And please don’t forget, the most abundant renewable resource is your imagination. ⁓ My name is Patrick Hypscher and this is Circularity FM, the podcast about understanding, building and managing circular business models.