National New Markets Fund LLC has closed $15 million in New Markets Tax Credit (NMTC) allocation to help finance equipment for the first urban mining refinery in the U.S. capable of retrieving high-value metals including gold, silver, copper and palladium from electronic waste.
An estimated 40 million tons of such e-waste is discarded globally each year, with only about 13 percent currently undergoing some form of recycling: The rest winds up in the trash.
Built and operated by BlueOak Resources Inc., the new facility will be located in Osceola, Arkansas -- a highly distressed rural area with a 44.3% poverty rate and 12.7% unemployment rate. It is scheduled to become operational by the end of 2015 and expected to create 75 high-paying permanent jobs with extensive training and salaries averaging $50,000 per year.
"Our NMTC investment in BlueOak will help create high-quality jobs and transform a part of Arkansas ranked consistently among the poorest regions in the nation," said National New Markets Fund President Deborah La Franchi. "It will also create a new, vastly superior model for solving one of our most acute environmental challenges."
E-waste is a rapidly growing problem as demand increases worldwide for cell phones, computers and other electronic devices. The dumping of such waste represents an ecological disaster, especially in developing countries where it is often sent to be salvaged in unsafe, environmentally-devastating conditions. In addition, dumping results in the loss of millions of tons of precious metals (gold, copper, silver and palladium) and other resources.
The $15 million New Markets Tax Credit allocation from Los Angeles-based National New Markets Fund was matched by a $15 million allocation from Arkansas-based Heartland Renaissance Fund. U.S. Bank served as the project's tax credit investor.
"The New Markets Tax Credit program was critical in making this project a reality," said Priv Bradoo, CEO and co-founder of BlueOak. "It will enable us to realize a tremendous opportunity, both in recovering value from rapidly growing electronic scrap streams as well as the creation of jobs within the Osceola community."
La Franchi emphasized that the new facility, with its very advanced, environmentally-friendly technology, has the potential to become a "game changer" by creating what she described as "a new paradigm for how e-waste is managed in the United States." Once the new facility is operational, BlueOak plans to focus on expanding its prototype nationwide
National New Markets Fund CEO Belden Hull Daniels added, "Having known Osceola's poverty from many years of working in the Arkansas Delta, we are proud to finance this exciting project and help create jobs, wealth and a cleaner, more environmentally sustainable solution to e-waste."
In addition to recycling precious metals, operations at BlueOak will reduce the need to mine for virgin ore, which is expensive and has detrimental environmental impacts. It will also reduce the shipment of e-waste to developing countries, where it is often picked apart over open pit fires in order to melt away plastic and obtain precious metals, with terrible environmental impacts.
"We seek out these highly innovative models that have far-reaching positive impacts," said Joe Hennessee, project manager of U.S. Bancorp Community Development Corporation, the community development subsidiary of U.S. Bank. "BlueOak has the potential to not only benefit the environment through efficient e-waste management, but also greatly benefit the residents of Osceola."
New Markets Tax Credits (NMTCs) were established by Congress in 2000 to stimulate investment and economic growth in designated low-income communities. They raise investor capital and leverage public and private funding to provide borrowers, like BlueOak, with financing in the form of favorable rates and flexible below-market terms. Such financing will enable BlueOak to build a new model for recycling e-waste in the U.S., while also creating new employment opportunities.