Australia mining tyre disposal highlights recycled rubber opportunity

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Australia mining tyre recycling

Highlights

Only 2 percent of off-the-road mining tyres are recycled in Australia, leaving over 100,000 tonnes buried or landfilled annually and $200 million in raw rubber wasted.
Natural rubber supply faces a projected global shortfall of 317,000 tonnes by 2026 due to erratic weather in Asia and rising demand from heavier electric vehicles.
Despite $82.7 million in public and private investment, Tyrecycle's Pilbara plant operates at just 10 percent of its 30,000-tonne capacity due to lack of regulatory mandates on tyre burial.

Rubber shortfall sharpens focus on buried tyre value

As reported by ABC News, the Australian Tyre Recyclers Association says only 2 percent of off-the-road mining tyres are recovered, even though the rest of the tyre market collects about 96 percent of passenger and commercial tyres for recycling. The group says miners have for decades been legally allowed to bury, stockpile or send to landfill more than 100,000 tonnes of end-of-life tyres each year.

ATRA executive officer Robert Kelmen says the scale of the discarded material is significant because individual mining tyres can weigh four, five or six tonnes. The association's report estimates that up to $200 million of raw natural rubber is being buried on mine sites each year, with that value likely to rise as global production falls behind demand.

The Association of Natural Rubber Producing Countries forecasts a natural rubber shortfall of 317,000 tonnes in 2026, citing erratic weather across tropical plantations in south-east Asia. University of Melbourne rubber expert Miles Kenney-Lazar says flooding, climate change and other environmental changes are increasingly affecting plantations, while demand is also rising as heavier electric vehicles wear through rubber more quickly.

Recycling capacity awaits stronger regulation

The West Australian and Commonwealth governments have invested a combined $20.7 million in six tyre recycling infrastructure projects through the Recycling Modernisation Fund, with industry contributing a further $62 million. One project is Tyrecycle's plant in Port Hedland in the Pilbara, a region that holds 49 percent of the nation's mining tyres.

Yet 18 months after opening, the facility is processing only 2,000 to 3,000 tonnes a year, well below its 30,000-tonne capacity, according to company spokesperson Ashley Battilana. He says the infrastructure and domestic and international demand are already in place, but incoming feedstock remains too limited because miners can still bury tyres instead of paying recycling costs upfront.

Western Australia's Chamber of Minerals and Energy says the sector aims to minimise waste where feasible, but points to logistical hurdles in moving tyres from remote mine sites and to WA's relatively small crumb-rubber market. Earlier this year, a parliamentary inquiry recommended a staged legislative reduction in onsite burial of off-the-road tyres over the next five years, and a spokesperson for Industry and Innovation Minister Tim Ayres says the federal government is still considering its response.

Our earlier coverage of Hainan Rubber’s proposed perpetual securities explained how the company aimed to refinance offshore debt via notes issued by its majority-owned unit Halcyon Agri, with features such as subordination and coupon-deferral risk. We also outlined the scale of Hainan Rubber’s natural rubber operations and the factors influencing its leverage and liquidity, providing context on how major producers are positioning themselves amid changing conditions across the tyre and rubber value chain.

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