Highlights
- Only 1% of rare earth magnets are currently recycled.
- China dominates 60-90% of global production and processing of rare earth magnets.
- Multiple global technologies are emerging to reclaim critical minerals, including:
- Hydrogen decrepitation
- Hydrometallurgy
- Advanced separation techniques
- By the late 2020s, experts forecast thousands of tons of recycled rare earth elements annually.
- This shift could potentially reshape geopolitical resource dynamics.
A 1% Problem with 100% Strategic Implications
Only about 1% of rare earth magnets are currently derived from recycled sources—a stunning shortfall considering China’s dominance in rare earth mining (60%+), processing and refining (85%+), and magnet production (90%+). For heavy rare earth magnets like those using dysprosium and terbium, China’s control approaches a total monopoly.
With global demand for neodymium, praseodymium, and dysprosium surging due to EVs, wind turbines, electronics, and defense systems, the strategic risk is glaring. Nearly all spent magnets still end up in landfills or low-grade scrap. However, innovation is now tackling this waste head-on. New technologies and business models are positioning recycling as the most scalable and sustainable fix to rare earth dependence. Here’s where the race stands.
Despite growing efforts in the U.S., Europe, and Japan to recycle rare earths and reduce dependence on China, Beijing remains the dominant player in the global supply chain. While Western countries are ramping up investments in recycling technologies and alternative sources, these efforts face steep technical, financial, and timeline challenges. Meanwhile, electric vehicles (EVs), defense platforms like the F-35, and consumer electronics remain deeply reliant on Chinese-sourced rare earths and critical minerals. Even with slowing EV adoption in the U.S. with the new Trump administration, these materials remain essential to both commercial and military sectors.
Japan’s early investment in closed-loop recycling, combined with its electronics and auto manufacturing base, has made it a leader in rare earth magnet recovery. The focus is now shifting toward improving efficiency, scaling to EV volumes, and reducing reliance on Chinese refiners. Japan remains a model for magnet recycling innovation, particularly in the development of hydrogen-based and low-waste recovery systems.
China has compounded the West’s urgency by tightening export controls on a widening list of critical minerals—ranging from terbium and cerium to gallium, germanium, antimony, and tungsten—many with military and dual-use applications. Analysts warn that Western countries currently have no viable near-term substitute for China’s supply dominance, especially in refining and magnet production. While future EV recycling may yield an excess stockpile outside China, current U.S. EV adoption lags, and mining and processing projects outside China face lengthy lead times. The recycling push, though strategically vital, suggests Rare Earth Exchanges (REEx) is thus a partial hedge—not a full solution—to China’s mineral chokehold.
Tech Showdown: How Rare Earths Are Being Reclaimed
1. Hydrogen Decrepitation (Direct Recycling / Short Loop)
Physical fragmentation of NdFeB magnets using hydrogen gas, preserving alloy integrity and minimizing chemical processing.
- HyProMag Ltd (opens in a new tab). (UK)
• Origin: University of Birmingham
• Tech: Hydrogen Processing of Magnet Scrap (HPMS)
• Markets: UK, Germany, expanding to U.S. via CoTec Holdings (opens in a new tab) (OTCMKTS: CTHCF)
• Applications: Hard disk drives, EV motors OTCMKTS: CTHCF - Noveon Magnetics (opens in a new tab) (USA)
• Formerly: Urban Mining Co.
• Tech: Hydrogen decrepitation + sintering to produce fully recycled NdFeB magnets
• Location: Texas
• Support: $28M from U.S. DoD
• Claim: >99% recycled magnet content with >90% energy/carbon savings - Hitachi Metals, Ltd. (Proterial (opens in a new tab)) (Japan)
• Tech: Pioneered early hydrogen-based magnet recycling
• Focus: NdFeB and ferrite magnets
• Status: Mature in-house recycling of scrap from manufacturing and post-consumer waste
2. Hydrometallurgical & Pyrometallurgical Processes (Long Loop)
Chemical/thermal breakdown of magnets to extract rare earth oxides for reprocessing into new materials.
- Phoenix Tailings (opens in a new tab) (USA)
• Location: Massachusetts
• Tech: Zero-acid hydrometallurgical process + molten salt electrolysis
• Feedstock: Mine tailings, industrial scrap
• Scale: Pilot (200 t/yr), targeting 4,000 t/yr by 2026
• Backers: BMW, Sumitomo, DOE
- Cyclic Materials (opens in a new tab) (Canada)
• Tech: Two-stage hydrometallurgical recovery (Mag-Cycle™ + REEPure™)
• Feedstock: EV motors, electronic scrap
• Scale: Demo plant in Ontario, EU expansion
• Efficiency: >90% REE recovery
• Backers: Jaguar Land Rover, Natural Resources Canada - Solvay SA (opens in a new tab) (Belgium/EU)
• Focus: Recycling cerium oxide and lanthanum compounds from polishing powders and battery waste
• Tech: Conventional solvent extraction, moving toward greener leaching agents
• Role: Industrial-scale materials processor and recycler in the EU supply chain - Umicore (opens in a new tab) (Belgium)
• Focus: Rare earth recycling from automotive catalysts and battery waste
• Not magnet-focused per se, but a leader in refining spent catalysts and developing closed-loop systems
• Expansion: Cobalt-free materials and circular tech platforms - Osram Licht AG (opens in a new tab) (Germany)
• Tech: Pyrometallurgy and chemical extraction from phosphor and fluorescent lamp materials
• Focus: Recovering europium, yttrium, terbium from legacy lighting waste streams - Global Tungsten & Powders Corp (opens in a new tab). (USA/Germany—subsidiary of the Plansee Group (opens in a new tab))
• Specialty: Tungsten, but applies thermal and chemical recycling for critical metals
• Not rare-earth focused but participates in adjacent critical material recovery
3. Advanced Separation & Novel Methods
Innovative, often modular extraction and purification techniques designed for high selectivity, low toxicity, and low-energy usage.
| Company/Og | Details |
| ReElement Technologies (opens in a new tab) (USA) | Location: Indiana Tech: Ion-exchange chromatography (Purdue-developed) Feedstock: Recycled magnets, e-waste, swarf Purity: >99.5% for Nd, Pr, Dy, Tb Cost: Claims parity with Chinese production ($25–35/kg)— Partners: POSCO International (South Korea) |
| Texas A&M (Dr. Jenny Qiu Lab (opens in a new tab)) | Tech: 3D graphene-based carbon foam for selective REE adsorption Feedstock: Shredded e-waste (low concentration streams) DOE Funding: $17M Status: Lab-to-commercial scale-up, seeking industry partnerships |
| Oak Ridge National Lab (opens in a new tab) / Ames Lab (opens in a new tab) (USA) | Tech: Membrane Solvent Extraction (MSX) Feedstock: Scrap magnets Recovery: >97% REEs in acid-free processing Focus: Scalable, clean, modular separation for post-industrial and post-consumer scrap |
| REEcycle Inc. (USA) (opens in a new tab) | Location: Texas Tech: Electrochemical and mechanical separation of neodymium and dysprosium from magnet scrap Specialty: Urban mining of rare earths with minimal chemical input Scale: Pilot demonstrations, commercialization under way |
Other Major Players & Producers (U.S.-Based)
Focused more on upstream production or rare earth carbonate but now entering recycling pathways. Some key players include:
MP Materials (USA)
- Operation: Mountain Pass Mine, California
- Focus: PrNd oxide, Ce concentrate, bastnaesite processing
- Expansion: Building a U.S.-based magnet factory with Apple; aims to incorporate recycled feedstock
- Strategic: Largest U.S. rare earth miner and processor, supported by DoD & Apple
Energy Fuels Inc (opens in a new tab). (USA)
- Primary: Uranium producer, now producing rare earth carbonate at White Mesa Mill
- Thorium storage and REE recycling pilot
- Role: U.S. domestic processor with some REE recovery from monazite sand and secondary sources
Summary Table (Select Examples)
| Company/Org | Approach | Tech Summary |
| HyProMag | Hydrogen Decrepitation | HPMS (direct magnet recycling) |
| Noveon Magnetics | Hydrogen Decrepitation | NdFeB sintered magnets from scrap |
| Hitachi Metals | Hydrogen Decrepitation | Mature factory scrap recycling |
| Phoenix Tailings | Hydrometallurgy | Acid-free, zero-waste refining |
| Cyclic Materials | Hydrometallurgy | Dual-stage leach and REE separation |
| Solvay | Hydrometallurgy | Cerium, lanthanum from polishing scrap |
| Umicore | Hydrometallurgy | REEs from catalysts, circular materials |
| Osram Licht AG | Pyrometallurgy | Lamp phosphor REE recovery |
| Global Tungsten & Powders | Pyrometallurgy | Critical metals recycling (not REE-specific) |
| ReElement Technologies | Advanced Separation | Ion-exchange chromatography |
| Texas A&M (Qiu Lab) | Advanced Separation | Graphene carbon foam adsorbents |
| Oak Ridge / Ames Lab | Advanced Separation | Membrane-based extraction (MSX) |
| REEcycle Inc. | Advanced Separation | Electrochemical urban mining |
| MP Materials | Integrated Production + Recycling | U.S. mining + recycled magnet feed (via Apple deal) |
| Energy Fuels Inc | Mixed | REE carbonate from monazite; exploring recycling |
Who’s Leading the Charge? Global Activity and Alliances
North America The U.S. and Canada are at the forefront of innovation. In addition to Phoenix Tailings, ReElement, and Cyclic Materials, government support is accelerating growth:
- MP Materials & Apple signed a $500M deal to produce magnets from recycled feedstock in Texas, with $200M prepaid by Apple. Given the amount of capital MP Materials has raised and the DoD backing this group, it must be watched carefully.
- The DoD took an equity stake in MP Materials and is supporting Noveon Magnetics and others under the Defense Production Act. Since the Trump administration’s second term, a newfound urgency has unfolded with executive orders, 232 actions, and financial incentives in the Big Beautiful Bill.
Europe, driven by the EU’s Critical Raw Materials Act, aims to recycle 25% of key minerals by 2030.
- HyProMag is expanding its hydrogen recycling tech across the UK, Germany, and the U.S., backed by the Minerals Security Partnership.
- Companies like Solvay and research institutes in Germany, France, and Switzerland are driving solvent innovation and scale-up.
- A concentration of expertise has emerged in Germany, making it a leading European hub for rare magnet recycling. Its robust engineering foundation drives this, EU-backed policies for critical raw materials, and corporate partnerships focused on decarbonization and supply chain resilience. The country’s efforts primarily target neodymium-iron-boron (NdFeB) magnets used in EV motors, wind turbines, and electronics. Some key players include HyProMag GmbH (subsidiary of Mkango Resources Ltd.), UrbanGold GmbH, OSRAM Licht AG (now part of ams OSRAM) and Solvay’s German operations to mention some.
Japan and South Korea
Japan has decades of experience reclaiming REEs, triggered by China’s 2010 embargo. Companies like Hitachi and Honda have pioneered magnet and battery recycling. Other players in Japan include Honda Motor Corp (opens in a new tab), Dowa Holdings Co., Ltd (opens in a new tab) and Mitsubishi Materials Corp (opens in a new tab).
South Korea is entering via partnerships, such as ReElement’s supply deal with Posco, securing magnet-grade oxides for Korea’s booming EV sector. Korea’s DNA Link (opens in a new tab) is indeed involved in rare earth magnet recycling, specifically through a collaboration with Ionic Rare Earths Limited (opens in a new tab) (ASX:IXR (opens in a new tab)). REEx monitors Star Group (opens in a new tab).
China: Recycling Rising, But Not Dominating Despite its processing dominance, China has historically underinvested in post-consumer magnet recycling. Most recycling is internal—scrap reuse in manufacturing. But environmental crackdowns and strategic pressure are prompting new research into ionic liquid and bio-based processes.
Still, the West leads in published IP, pilot projects, and commercialization.
Follow the Money: VC, Government, and Corporate Commitments
- Phoenix Tailings, Cyclic Materials, and ReElement have each raised tens of millions in private capital.
- Major OEMs (e.g., Jaguar Land Rover, BMW, Apple) are forming offtake agreements or investing directly.
- The U.S. DOE has increased funding 5–10x for critical mineral recycling since 2020. Projects like Texas A&M’s carbon foam and Ames Lab’s membrane tech are now entering commercialization.
- The EU, Canada, Japan, and Australia are all developing national or bloc-level strategies to integrate secondary supply.
Outlook: From 1% to Circular Supply Chains
The road from 1% meaningful market share will require investment in infrastructure, industrial policy certainty, and industrial partnerships. But the pieces may be falling into place.
By the late 2020s, experts forecast thousands of tons of recycled REEs annually entering magnet production. Note this remains an optimistic forecast, and more detail for investors remains necessary. If successful, this shift will mitigate supply risk, reduce environmental impact, and curb China’s leverage.
The companies mastering REE recycling today could very well control tomorrow’s magnet supply chains—and potentially rewrite the rules of geopolitical resource dependence.
Reflection on Reality
REE—though not geologically rare—are difficult and costly to extract due to their low concentrations in ore and the complex processes required for separation, especially when tied to radioactive elements like uranium and thorium. Despite their critical role in modern technologies such as smartphones, EVs, wind turbines, and solar panels, almost none are recycled from consumer products due to economic and technical challenges, including low concentrations in e-waste and the absence of adequate recycling infrastructure.
However, as REEx discusses herein, efforts are underway to recover rare earths, particularly neodymium and dysprosium, from industrial waste streams like fluorescent bulbs and hard drives. Companies and labs in the U.S., Japan, and Europe are advancing these efforts. Simultaneously, manufacturers like Nissan and Tesla are reducing or eliminating rare earth usage via investments in recycling (Apple and MP Materials) as well as initiatives to increase efficiency improvements or alternative motor designs—pointing toward a potential future where both recycling and replacement strategies help mitigate dependence on China’s supply and the environmental costs of extraction.
Investors, take note:
Recycling REEs is no longer a research project. It’s a supply chain revolution in motion. But we are at the dawn, so all sorts of risks remain. REEx was launched in January 2025 to accelerate that revolution.
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