BATTLE CREEK, Mich. –
Last week, research and development officials at the U.S. Navy’s Battery Engineering Laboratories in China Lake, California, reached out to the Defense Logistics Agency for help in determining the proper disposal method for about 3,600 pounds of silver zinc batteries. With just a few brief emails, the Naval Air Warfare Center Weapons Division had found its answer and DLA Disposition Services’ Michael Vaughn was on the case.
Vaughn serves as the major sub-command’s Precious Metals Recovery Program process owner, where he coordinates with DLA property disposal site personnel to pull scrap from the waste stream that contains both high usage elements like gold and silver and rarer ones like palladium, rhodium, iridium, and platinum. The PMRP is self-funding and promises “no-cost” disposal for DLA customers looking to turn over precious metal-bearing material.
Every property turn-in document DLA accepts includes a field for Precious Metals Indicator Codes, or PMICs, that identify the precious metal content of all items assigned with a National Stock Number. A PMIC of “G,” for instance, means the item contains gold. An “S” stands for silver, “P” indicates the platinum family of metals, and so on. Vaughn said that not all precious metal-bearing scrap items turned over by the armed services are good candidates for recovery. The recovery process itself can be very costly, due to the difficulty of extracting the valuable metals from some items, and DLA has a list of precious metals-bearing items considered too cost ineffective to include, like computer monitors, Hard Drive Disks, and Microfiche.
By far and away, DLA’s most frequently included PMRP item type, by weight, is scrap coded P8E, or “Sorted Electrical/Electronic Scrap” containing precious metals. That means graphics cards, server boards, RAM sticks, solid state drives – the innards of computers, essentially. Vaughn said that in 2024, DLA Disposition Services’ current PMRP contract holder processed 22 lots of precious metals-laden scrap weighing 602,104 pounds – most of which was P8E electronics.
The end result for the agency? Deposits totaling 196,927.93 troy ounces of silver – about $6.85 million at current prices – were placed into DLA Troop Support’s inventory last year.
It’s hard to ignore that metals important to manufacturing are only getting more and more precious all the time. Gold made news on March 14 when it hit a record market value of $3,000 per troy ounce. Silver, currently trading just below $34 per troy ounce, has seen its value rise by more than 17% since just the start of this year. The agency’s website lists five precious metals available for order with prices set at the start of the fiscal year, meaning that even if day-to-day prices spike in the market, DLA-sourced precious metals offer “project price stability you can depend on.”
To give an example from the not-too-distant past, an ounce of gold on the open market sold for about $1800 just two years ago this month. At the time, DLA offered it as a commodity to DOD customers at $616 per troy ounce – a price calculated to simply cover PMRP operating costs.
DLA Troop Support Integrated Supply Team Chief Alexander Taddei leads a group of logisticians who procure bulk metals for the agency. They provide about a dozen current defense industrial base suppliers with raw material to help cut down on the costs of critical items like vehicle armor and marine vessel plating.
“We are ‘use agnostic,’” Taddei said. “Whatever they need metal for, we provide it.”
For Taddei, the PMRP is a small but valuable aspect of his team’s portfolio, which provides construction materials for some smaller-scale projects and is dominated by armed services maintenance and repair material needs. If a DLA-held precious metal can help knock down a project’s cost, his team will contact its third-party storage vendor and have them ship it directly to the service for use.
The agency’s PMRP effort currently returns only silver to its stockpiles, but that could change. Separately, a wide range of commodities are stored by DLA Strategic Materials at six locations across the U.S., including base and precious metals, rare earth metals like yttrium and neodymium, and non-metals like selenium and carbon fibers. The Strategic Material Recovery and Reuse Program overseen by DLA Strategic Materials, focuses on replenishing the National Defense Stockpile with critical materials like germanium and “super-alloys” used in turbine engines.