As deepening shortages push aluminium to record highs, a London-based startup is raising cash to boost production of the critical industrial metal from untapped reserves of scrap in Africa’s biggest cities.

Founded in 2015 by Raymond Onovwigun, a 31-year-old former plumber, Romco Metals has raised $6.2 million via a private share sale, valuing the recycler at $180 million. After developing a taste for trading scrap from job sites around the UK capital, Onovwigun now employs more than 500 people in Africa and expects growth to accelerate as the company taps the rapidly growing quantities of waste metal across the continent.

Romco is looking to triple the volume of scrap it processes from its expanding network of yards in a continent that currently supplies just 1% of the world’s recycled aluminium. Onovwigun’s initial focus will be on his operations in Nigeria and Ghana, recycling the lightweight metal that’s widely used in consumer products from drinks cans and phones to cars.

“With a range of private efforts underway to increase secondary supply, we will see Africa playing a major role in addressing both sustainability and supply,” Onivwigun said in an interview.

Scrap volumes will surge as Africa’s population grows to about 2-billion by 2040, up from 1.2-billion today, Onivwigun said. By 2025, Romco plans to produce 100,000 tons of aluminium from seven small-scale recycling plants, which will still only be a fraction of Africa’s supply potential, he said.

While making money by recycling metals has proven tricky for the biggest global processors -- Sims Metal Management and China’s Chiho Tiande posted losses in recent years amid market volatility and swings in industrial activity -- there are signs of a turnaround since the beginning of the pandemic.

Moreover, recycling aluminium is less energy-intensive than primary smelters, with automakers and industrial manufacturers starting to show a strong preference for metal with a lower carbon footprint, Onovwigun said. Romco’s facilities use 95% less power than the average smelter, according to the company.

Recyclers can also offer some relief to the rising supply stress in the aluminium industry, Onovwigun said.

“As the primary aluminium market surges, demand for materials flow directly into the secondary market,” he said. “This is good news for recyclers, as secondary suppliers play a key role in plugging the gap in material demand.”