In the late nineties an approach was made to the British Ministry of Defence for salvage rights on the Operation Deadlight U-boats by a firm who planned to raise up to a hundred of them. Because the wrecks were constructed in the pre-atomic age, they contain metals which are not radioactively tainted and which are therefore valuable for certain research purposes. … [1]
Truly a hot button issue for our times 
Hat tip to Eric M. for this one. We were just digging into our Greek Combos at Cousin’s and going over how subprime mortgages had messed up just about every corner of modern structured finance. My son then told me about something I didn’t know. Hot recycled metal from decommissioned nuclear power plants, among other places, is threatening to radioactively contaminate the entire world’s steel industry. The way he explained it to me, it’s just eerie how this unfolding story of risk and greed parallels the familiar dynamics of subprime. Truly, did we learn nothing from Tunagate? Even if the fish is pure, if all the cans are now "tainted," and there are prospects that radioactivity levels could rise, we could be in big trouble.
Now the credit crunch we all know and love will likely produce 5 or 6 years of total world financial meltdown, but the the potential fallout from a radioactive steel crisis would be the Real McCoy. We might ask, how long before CNBC’s Squawk Box starts having discussions a bit like this satire?
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Once you start looking it’s farcically easy to find signs of the familiar soothing sounds and private panic amongst the authorities. Last month a major German news magazine reported that inspectors were detecting hot steel in everything from bulk stainless trans-shipments destined for Russia to imported French elevator buttons.[2] (Yup, it really is a hot button issue.) A week ago that story elicited a response [3] in an Indian business journal that recalled (*ahem*) a history of even less careful investigation of scrap inputs into the country’s blast furnaces. (Doesn’t this sound just like the buyer’s regret experienced by Investment Banks, etc., after they shoveled tons of the output of subprime originators like Mortgage Lenders Network into MBS?) Last Sunday a steel industry newsletter highlighted the urgent need for radioactivity detection capabilities relative to inspecting inputs into Indian steel.[4] Another German source reported the discovery of 5 tons of contaminated steel wool,[5] but played down the public health risk.
Years ago, just when the housing bubble was starting to gain traction, the mildly alternative media was starting to sound the alarm.[6] Oh well, I suppose it sounded like a good idea at the time. Whether or not that particular bit of insanity got put into operation, eastern TN isn’t the only site in the world with lots of perfectly usable, if glowing, scrap metal seeking for a less than careful buyer. Who wouldn’t risk destroying someone else’s great-grandchildren’s health to make a quick buck? — if there were enough bucks involved. Of course there’s never just one cockroach. In fact, today is the first anniversary of the discovery in Italy of 30 tons of hot Chinese product,[7] while yesterday a major Indian paper alluded to the problem with decommissioned nuclear reactors,[8] albeit after the usual nod to medical isotopes. In many ways, this unfolding issue could well end up feeling like World War 3 in slow motion.
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[1]: "Operation Deadlight", Web page, History (postscript).
[2]: "Finds of Radioactive Steel on the Rise in Germany", by Christian Schwägerl, Spiegel, February 16, 2009.
Just how the radioactive isotope cobalt 60, which can be found in nuclear power stations or some medical technology, is finding its way into the Indian steel industry isn’t completely clear. It may be that sources of radioactivity, from hospitals for example, are being thrown into blast furnaces along with other scrap. The resulting steel is then sold to to companies abroad.
The dangerous import from Asia shows the downside of globalization. Cheaper is not always better. Machine manufacturers and metal-working companies in Germany know that the cheaper the steel coming from a supplier is, the more likely it is that a high proportion of the metal is from India.
In addressing the problem, officials at both the federal and state level, along with representatives of the metallurgy branch, have all struck a reassuring tone. Behind closed doors, however, authorities are deeply unsettled. A crisis meeting is scheduled for this week in Berlin — the second to focus on the issue. Environment Minister Gabriel is demanding proposals from both his own staff and from industry as to how the import of contaminated metal can be prevented in the future.
[3]: "Radioactive steel dulls engineering exports to Europe", by Ishita Ayan Dutt, Business Standard, February 25, 2009.
Fresh cases of radioactive steel in exports to Europe have been traced to India, putting exports of $23 billion of engineering goods in jeopardy.
Many containers carrying forgings, castings and other steel products to Germany were found to have a high level of Cobalt-60, large quantities of which are said to cause radiation, sickness and skin burns.
…“It was being seen as a non-tariff barrier and the government was expected to take it up at the World Trade Organization level. The ministry has also said that internally companies should be equipped to adopt corrective measures,” said Gupta.
…In 2004, Bhushan Steel had unknowingly imported missile scrap from Iran, which exploded in the factory. Since then, the company imports shredded steel scrap from developed countries, which are checked at the loading ports.
[4]: "Equipment to detect radioactive cargo at Major Ports vital", Steel Guru, March 1, 2009.
Major Ports do not have equipment to detect radioactivity or contaminated consignments, which exposes the cargo to quality, security and safety risks, besides damaging the reputation of the goods manufactured here.
…According to [Indian] government officials and exporters, some radioactive steel scrap was imported about 3 to 4 years back. This scrap was used to manufacture packaging material for heavy duty engineering goods consignments. Subsequently, consignments packed with the same radioactive steel were exported to the US in 2007.
[5]: "Tons of Radioactive Material From India Found in Germany", Deutsche Welle, February 15, 2009.
It said the most serious case was five tons of stainless steel wool which had to be disposed of by a nuclear-waste company, GNS.
The contamination was thought to be the result of the radioactive isotope cobalt 60, which is used in nuclear medicine, being inadvertently mixed with steel scrap and being melted down at three Indian steel works.
Anyone near the container of steel wool, which had been intercepted in August last year in the German port of Hamburg, would have received one millisievert of radiation in 24 hours.
[6]: "Radioactive Recycling", by Susan Q. Stranahan, Mother Jones, July/August 2002.
From the air, the East Tennessee Technology Park looks like clusters of enormous Wal-Marts, sprawling across 4,700 acres in the rural countryside west of Knoxville. But for decades the Oak Ridge complex had a more ominous name — the K-25 site. Its mission: to produce highly enriched uranium for nuclear weapons.
Today, the facility contains tons of contaminated junk — machinery, metal, concrete, and tools — some of which will remain radioactive for generations. Faced with a massive cleanup, the Department of Energy has come up with an ingenious plan to get rid of the slightly radioactive scrap: "recycle" the metal and sell it for reuse. Both the DOE and the Nuclear Regulatory Commission (NRC) are quietly revising rules that would allow millions of tons of radioactive garbage at the nation’s weapons facilities and nuclear reactors to be converted into consumer products and building materials. Under the plan, the leftover metal could end up in baby strollers, bikes, frying pans, engine blocks, and I-beams.
[7]: "Italians seize 30 tons of radioactive steel", AP / USA Today, March 3, 2008.
Italian police said Monday they have seized 30 tons of Chinese-made steel that had been contaminated by a radioactive substance.
…The steel had been accidentally mixed during production with cobalt-60, a radioactive isotope of cobalt, police said. Officers seized it last week after radiation turned up in tests on metal scraps at companies across Italy that had used part of the shipment.
[8]: "Row over radioactive steel exports erupts again: Indian steel exporters are worried about its adverse consequences", by Vaiju Naravane, The Hindu, March 2, 2009.
The scope of the 1999 Spanish Protocol involves the detection and monitoring of radioactivity in storage facilities and industries where scrap metal is collected and handled. The Protocol is a voluntary agreement which defines the radiological surveillance of scrap metal and its products and the duties and rights of the signatories. A harmonised regulatory approach to the issue of inadvertent radioactive material in scrap metal would also have the benefit of facilitating trade, especially of materials originating from the demolition or decommissioning of nuclear installations or other facilities.
…“The German Environment Ministry memo referring to the consignment sent back from Hamburg speaks of ‘metal pieces.’ The consignment was on its way to Russia and the radiation levels it emitted were very high — 71 microsieverts per hour. The disconcerting aspect of the whole thing is that most of the material found (now standing at more than 200 tons) was actually small pieces left after processing. So authorities are now following leads as to where the actual material was used. If you assume 10 per cent waste in production the actual amount of steel we talk about could be closer to 2000 tons. But that’s just my assumption. In one case in Mecklenburg-Vorpommern, the steel actually ended up in a food processing machine — the owner of the company in charge said food would be safer with this machine due to radiation, but I guess this was a joke,” Christian Schwaegerl, the author of the Der Spiegel article told The Hindu.
…Western nations have been indiscriminately exporting their polluted waste to emerging countries since disposal is both hazardous and expensive. Indian waste disposal firms have tended not to look too closely into the kind of junk they were taking off western hands. The Hindu’s successful campaign to prevent the French aircraft carrier the Clemceau from being dismantled in India was an attempt to stem such traffic. But soon after the Clemenceau was turned back, the Supreme Court allowed another toxic ship, the former cruise liner France, into the port of Alang for dismantling. For every battle won, there are several that are lost.
Yeah… I get it. Not good, but not that big of a deal.