Collectors turn humans into metal by placing them in a series of chitinous pods, and connecting tubes to the pod. Some sort of substance is pumped into the pod, and tubes coming out of the pod pump it into an.... um.... shall I say... Reaper infant? in a manner akin to nursing a baby, just in a horrible sort of way. Once this liquid is pumped into the Reaper, it presumably hardens into metal components. Basically, the goal is to "mine" the human for resources, and then use them to build Reapers. By the way, the human consciousness is still intact in the metal form, meaning that the humans.... are still alive.