Rare Earth Recycling

The Recycling Imperative

Despite the strategic importance of rare earth elements and the well-documented risks of supply concentration in China, less than 1 percent of rare earths are currently recycled globally. This extraordinarily low recycling rate stands in stark contrast to metals like lead (over 99 percent recycled from batteries), platinum group metals (up to 95 percent from catalytic converters), and even copper and aluminum, which achieve recycling rates above 30 percent. The gap between the critical status of rare earths and the almost complete absence of recycling infrastructure represents both a vulnerability and an opportunity. As millions of electric vehicles, wind turbines, and electronic devices reach end of life in the coming decades, the rare earths embedded in their components could become a significant secondary supply source — if the technical, economic, and logistical barriers to recycling can be overcome.

Sources of Recyclable Rare Earths

The most promising sources of recyclable rare earths fall into several categories. NdFeB permanent magnets represent the highest-value recycling target, containing approximately 30 percent rare earth content by weight — primarily neodymium, praseodymium, and dysprosium. End-of-life magnets can be recovered from hard disk drives, electric vehicle motors, wind turbine generators, MRI machines, industrial motors, and consumer electronics speakers. Manufacturing scrap from magnet production — including kerf losses from cutting and grinding, off-specification magnets, and hydrogen decrepitation fines — represents an immediately available, high-purity feedstock that several companies already process. Nickel-metal hydride (NiMH) batteries from hybrid vehicles and portable electronics contain lanthanum-rich mischmetal in their negative electrodes. Fluorescent lamp phosphors contain europium, terbium, yttrium, and cerium. Fluid cracking catalysts from petroleum refineries contain lanthanum and cerium. Each of these waste streams presents different collection, disassembly, and processing challenges.

Recycling Methods for NdFeB Magnets

Several technical approaches have been developed for recovering rare earths from NdFeB magnets, each with distinct advantages and limitations. Hydrometallurgical recycling involves dissolving the magnet material in acid — typically hydrochloric or nitric acid — and then using solvent extraction or selective precipitation to recover individual rare earth elements as oxides or salts. This approach leverages the same separation technologies used in primary processing and can achieve high purity, but it destroys the magnet microstructure and requires the recovered materials to go through the full alloy-to-magnet manufacturing process again. It also generates acid waste streams that require treatment.

Pyrometallurgical methods use high-temperature processing to extract rare earths. Molten salt electrolysis, liquid metal extraction (using molten magnesium, copper, or silver as solvents for rare earths), and slag-based approaches have all been demonstrated at laboratory and pilot scale. These methods can process mixed or contaminated magnet scrap and may offer simpler flowsheets than hydrometallurgy, but they are energy-intensive and the separation of individual rare earth elements from the recovered mixture still requires hydrometallurgical steps.

The most innovative approach is direct magnet-to-magnet recycling, which aims to preserve the NdFeB crystal structure and magnetic properties during reprocessing. The hydrogen decrepitation (HD) process exposes magnet scrap to hydrogen gas at moderate temperature and pressure, causing the NdFeB alloy to absorb hydrogen and fracture into a fine powder. This powder can be blended with virgin material, re-pressed, and re-sintered into new magnets without going through the oxide-metal-alloy pathway. The HPMS (hydrogen processing of magnet scrap) variant developed at the University of Birmingham enables processing of magnets still embedded in their housings, eliminating the need for manual extraction. Direct recycling offers significant energy and cost savings, but it requires consistent feedstock composition and cannot easily adjust the rare earth ratio to match current market specifications.

Economic Barriers to Rare Earth Recycling

The low recycling rate for rare earths is not primarily a technical problem — it is an economic one. Several structural barriers prevent recycling from reaching commercial scale. Collection and disassembly costs are high because rare earth-containing components are typically small, embedded within larger products, and dispersed across millions of consumer devices. Extracting a 2-gram magnet from a hard disk drive or a 30-gram magnet assembly from a power steering motor requires manual labor that is expensive in developed economies. The small magnet sizes in consumer electronics also mean that individual units contain rare earths worth only pennies to dollars, providing little economic incentive for recovery. The volatile pricing of rare earth elements adds further uncertainty — recycling investments predicated on high rare earth prices may become uneconomic if prices fall, as occurred after the 2011 price spike.

Competition from low-cost Chinese primary production further undermines the economics of recycling. Chinese rare earth processors benefit from economies of scale, established infrastructure, lower labor costs, and government support that allow them to sell separated rare earth oxides at prices that recyclers in other countries struggle to match. Unless recycling operations can achieve processing costs below prevailing market prices, they cannot operate profitably without subsidies or policy mandates.

The EV Wave: A Game-Changer for Recycling

The economics of rare earth recycling are poised to shift dramatically as the first wave of electric vehicles reaches end of life. Unlike a smartphone magnet weighing a few grams, an EV traction motor contains 1 to 3 kilograms of NdFeB magnet material worth $50 to $200 at current prices. A single wind turbine generator may contain magnets worth $100,000 or more. These larger, higher-value magnets fundamentally change the collection economics. Furthermore, EV and wind turbine end-of-life pathways are more structured than consumer electronics waste — vehicles pass through dismantling facilities and wind turbines are decommissioned by their operators, creating natural collection points. Industry analysts project that by 2035, the volume of magnet rare earths available for recycling from end-of-life EVs alone could exceed 15,000 tonnes annually — enough to meaningfully supplement primary supply.

Policy and Regulatory Drivers

Government policy is increasingly pushing rare earth recycling toward commercial viability. The European Union's Critical Raw Materials Act sets a target of meeting at least 25 percent of the EU's rare earth consumption through recycling by 2030 and mandates collection and recycling requirements for permanent magnets in certain products. The EU Battery Regulation requires labeling and recyclability standards that will facilitate rare earth recovery from NiMH batteries. In the United States, the Department of Energy's Critical Materials Institute and ARPA-E have funded numerous rare earth recycling research programs, and the Inflation Reduction Act provides tax incentives for domestically sourced critical minerals, including recycled content. Japan, which imports virtually all of its rare earths, has been a pioneer in urban mining research and operates the world's most advanced electronic waste collection and processing systems. These policy frameworks are creating market conditions that favor recycling investments even when primary rare earth prices are moderate.

Companies and Projects Leading Rare Earth Recycling

A growing number of companies are developing commercial rare earth recycling operations. Urban Mining Company in the United States produces NdFeB magnets from 100 percent recycled rare earth feedstock using its proprietary magnet-to-magnet process. HyProMag, a spin-out from the University of Birmingham, is commercializing the HPMS hydrogen processing technology for magnet recycling in the United Kingdom. Cyclic Materials in Canada is developing hydrometallurgical recycling processes for both magnets and NiMH batteries. Solvay (now Syensqo) operates one of the few commercial-scale rare earth recycling operations, recovering europium, terbium, and yttrium from fluorescent lamp phosphors at its La Rochelle facility in France. In China, several state-owned rare earth companies operate magnet scrap recycling facilities, processing manufacturing waste from the country's dominant magnet production industry. These early movers are proving the technical and, in some cases, economic viability of rare earth recycling, laying the groundwork for a sector that is expected to grow substantially in the coming decade.

Rare earth recycling is transitioning from a research aspiration to a commercial reality, driven by growing end-of-life volumes, supportive policy frameworks, and the strategic imperative to diversify supply chains away from China. While significant technical and economic challenges remain, the trajectory is clear: recycling will play an increasingly important role in meeting global rare earth demand. For context on how recycled supply fits into the broader market, see our analysis of rare earth pricing and market structure.