Metal recycling has become a genuinely different business to run than it was a few years ago. South Africa’s recycling rates for metal remain among the highest globally, but the regulatory environment has tightened considerably in response to cable and infrastructure theft, and a business that ignores the new compliance requirements will not stay open long regardless of how good its operations are.
This guide covers what has changed, what the compliance load actually looks like now, and how to set the business up properly from the start.
Registration under the Second-Hand Goods Act is now compulsory for sellers too
Historically, registration requirements under the Second-Hand Goods Act applied mainly to buyers of scrap metal. That has changed: both buyers and sellers of scrap metal are now required to register, and applicants need to present a tax clearance certificate as part of that process.
This is not a formality you can skip while you get established. Trading unregistered exposes you to the same penalties as trading without a business licence, and it closes off legitimate buyers, who increasingly will not deal with an unregistered counterparty given their own compliance exposure.
Cash payments are being phased out
New rules ban cash transactions for scrap metal trading in favour of electronic transfers, specifically to make transactions traceable and harder to use for laundering stolen material. Build your business around EFT payments from day one rather than treating this as a later administrative change, since cash-based buying is exactly the practice these rules were written to end.
Monthly reporting is now part of the job
Registered dealers are required to submit detailed reporting, covering the date of each transaction, the type and grade of metal, tonnage, the value involved, and the registration details of the counterparty, to a centralised system that feeds into the International Trade Administration Commission. This is a genuine administrative load, not a box-ticking exercise, and it needs a proper record-keeping system behind it rather than a notebook.
Build this into your operating costs and your time budget from the outset. A business that treats this reporting as optional or an afterthought is the one that gets shut down first when compliance is checked.
Choosing your focus within metal recycling
The industry covers several distinct materials, each with different demand, different prices, and different regulatory attention. Beverage cans and general scrap steel are the highest-volume, lowest-margin-per-unit segment. Copper carries by far the most regulatory scrutiny, given its direct link to cable and infrastructure theft, and expect closer questioning from both regulators and legitimate buyers if copper is a significant part of your business. Electronic waste is a growing category with its own additional handling considerations around hazardous materials inside discarded electronics.
Pick a focus based on realistic local supply and the compliance appetite you are prepared to carry, rather than chasing whichever material appears most profitable in isolation. Broader recycling categories beyond metal are covered in our list of six recycling business ideas to consider.
What it actually costs to set up
Budget for the basics: a vehicle suited to collection, scales for accurate weighing, secure storage that protects both the material and the business from theft, and the systems needed for the compliance reporting above. Metal prices vary considerably by type and move with global commodity markets, so avoid budgeting off a single headline price per kilogram, since copper, steel and aluminium trade at very different rates that also shift month to month. Confirm current buying and selling prices directly with buyers rather than working from an old figure.
Setting up properly
- Decide your material focus and confirm there is genuine local supply and manageable competition for it.
- Register the business with the CIPC and get your tax affairs in order, since you will need a tax clearance certificate for the Second-Hand Goods Act registration.
- Register under the Second-Hand Goods Act as both a buyer and seller before you trade a single kilogram.
- Set up electronic payment infrastructure rather than planning around cash.
- Build your record-keeping and reporting system before you need it for the first monthly submission, not after.
- Secure funding if you are not self-financing, from a bank, a development finance institution, or a private investor.
- Start operations, with staff, premises and marketing already planned rather than improvised once you are trading.
Is metal recycling still profitable given the new rules?
Yes, for an operator who builds compliance in from the start rather than treating it as a cost to minimise. The regulatory tightening has pushed out informal, non-compliant operators, which if anything improves the position of a properly registered business competing for the same supply. Margins depend heavily on which material you focus on and how efficiently you run collection and processing, not on the regulatory environment alone.
Frequently asked questions
Do I need to register even if I only recycle small volumes?
Yes. Registration under the Second-Hand Goods Act applies to both buyers and sellers of scrap metal regardless of volume, and trading unregistered carries real legal exposure.
Can I still pay cash for scrap metal?
The direction of travel is firmly away from cash, with new rules requiring electronic transfers specifically to make transactions traceable. Build the business around EFT from the outset.
What is the biggest regulatory risk in this industry right now?
Trading unregistered, or continuing to use cash transactions as the new rules phase them out. Both expose you to penalties and cut you off from legitimate buyers who are themselves under compliance pressure.
Which metal is most profitable to recycle?
It varies by location and by global commodity prices, which move constantly. Copper typically commands the highest price per kilogram but also carries the most regulatory scrutiny given its link to infrastructure theft.
How much does it cost to start a metal recycling business?
Budget for a collection vehicle, scales, secure storage, and the systems needed for compliance reporting. Costs vary widely with scale and material focus, so build a specific budget for your intended operation rather than working from a generic figure.
Before you buy your first kilogram
Complete your Second-Hand Goods Act registration and set up electronic payment infrastructure before you trade anything, not after. Related opportunities in the wider recycling space are covered in our guide on starting a recycling business in South Africa.
This article was updated in September 2026.
