Australia Sell business metals process

Posted on by Bilal

1. Selling Metal: The Transaction Process

Since 2016–2018, most Australian states (NSW, VIC, QLD, WA) have implemented the Scrap Metal Industry Act, which revolutionized how metal is traded to prevent the sale of stolen goods.3

The “No Cash” Rule

  • Traceable Payments Only: It is illegal for scrap dealers to pay cash for metal.4 Payments must be made via Electronic Funds Transfer (EFT) or a cheque (not made out to cash).5
  • Identification: Sellers must provide a valid Photo ID (Driver’s License or Passport).6 Dealers are required by law to record your name, address, and vehicle registration.7

Maximizing Value (2025 Pricing)

Metal TypeEst. Price (AUD/kg)Where to find it?
Copper (No. 1)$9.50 – $11.50Stripped electrical wire, clean piping.
Brass$5.50 – $6.50Plumbing fixtures, valves, ornaments.
Aluminum$1.20 – $1.80Rims, window frames, extrusion.
Steel / Iron$0.10 – $0.25Car bodies, appliances, beams.

2. Selling a Recycling Business: The Exit Strategy

Selling a scrap metal business in Australia is complex due to heavy equipment assets and environmental liabilities.

Step 1: Valuation & Financials

Most Australian scrap yards are valued on a multiple of EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), typically ranging from 3x to 5x depending on the “Plant & Equipment” value.

  • Plant Value: Includes shredders, balers, excavators, and EPA-compliant drainage systems.
  • Inventory: Often sold at “landed cost” or market value at the time of settlement.

Step 2: Compliance Audit

A buyer’s due diligence will focus heavily on your “Right to Operate”:

  • EPA Licenses: Evidence that the site meets soil and water contamination standards.8
  • SLED Registration: In NSW, for example, the business must be registered with the Security Licensing & Enforcement Directorate.9
  • Council Zoning: Verification that the yard has permanent “General Industrial” or “Heavy Industrial” zoning.

Step 3: Transaction Structure

  • Asset Sale vs. Share Sale: Most buyers prefer an asset sale to avoid historic tax or legal liabilities.
  • Work-in-Progress (WIP): Agreements on how to handle metal currently in the processing pile at the time of handover.

3. Australian Regulatory Checklist

If you are operating or selling in this sector, ensure you are compliant with these 2025 standards:

  • GST & ABN: If the seller doesn’t provide an ABN, the buyer must withhold 47% of the payment for the ATO.10
  • Record Keeping: All transaction records (ID, weight, metal type) must be kept for 3 to 5 years (depending on the state).11
  • Heavy Vehicle National Law (HVNL): Ensures that the transport of bulk scrap via trucks complies with fatigue and load management laws.

Would you like me to help?

I can assist further by:

  • Drafting a due diligence checklist for buying/selling an Australian scrap yard.
  • Creating a Standard Operating Procedure (SOP) for staff to ensure compliance with the “No Cash” laws.
  • Researching specific regional scrap prices for your local Australian city (e.g., Sydney vs. Perth).