Global Rare Earth Recycling Surges as US, EU, and Leading Companies Boost Capacity【SMM Analysis】

Global rare earth recycling rates remain below 1% to date. In 2025, the US and Europe accelerated support for domestic recycling capacity—the EU’s Critical Raw Materials Act (CRMA) mandates that at least 25% of strategic raw material consumption come from recycling by 2030, while China’s series of export controls in 2025 turned the “urban mine” from an ESG slogan into a supply chain imperative. However, the real driver of the industry inflection point is not policy documents, but the intensive recycling deployments by leading companies such as MP Materials, Noveon, Cyclic Materials, HyProMag, and Carester. They have unanimously shifted the competitive focus from “lab recovery rates” to “who can stably secure waste magnets, and who can turn recycled powder into material that magnet manufacturers are willing to sign offtake agreements for.”

North America: Two Routes in Parallel—Vertical Integration and Short-Process

MP Materials​ is pursuing the only full-chain closed loop in the West—“mine–separation–recycling–magnet.” On July 15, 2025, MP and Apple announced a $500 million collaboration to build a dedicated recycling line at Mountain Pass, California, processing waste magnets into feedstock for the Fort Worth, Texas “Independence” magnet plant, delivering 100% recycled-content magnets starting in 2027. Apple prepaid $200 million, and Independence magnet capacity will expand from 1,000 t/yr to 3,000 t/yr. The key to this approach is using the primary mining business to cross-subsidize the recycling line, allowing recycled material to bypass Chinese oxide export licensing constraints and be directly consumed by the magnet plant—third-party estimates suggest this partnership could enable the US to contribute approximately 20% of global recycled rare earth production by 2030, but this is only an analyst forecast, not disclosed by MP.

Noveon Magnetics​ (San Marcos, Texas, formerly Urban Mining Co.) specializes in the Magnet-to-Magnet® patented short process: without crushing the casing, it selectively dismantles hard disk, motor, and MRI magnets, and claims its recycled powder can be blended 100% back into sintered NdFeB without downgrading the grade. In February 2025, it signed an offtake agreement with Nidec, one of the world’s largest motor manufacturers, embedding the “pure recycling plant” business model into the motor supply chain. It proves one thing: without touching mining, by focusing on crush-free pretreatment and magnet maker certification, a recycling plant can survive independently.

Cyclic Materials​ uses a “hub-and-spoke” network to secure feedstock. In January 2026, it announced an $82 million investment in a recycling park in McBee, South/North Carolina, with an initial capacity of 600 t/yr of mixed rare earth oxides (MREO), scaling to 1,800 t/yr long-term, and long-term magnet processing volume of 6,000 t/yr. Simultaneously, it signed a 10-year exclusive swarf recycling agreement with VACUUMSCHMELZE to lock in high-end feedstock. The combination of its Kingston demonstration plant, Mesa pretreatment facility, and Arizona separation plant helped it raise cumulative equity financing of $237 million by August 2026. However, a sobering note: its Kingston pilot using Mag-X+RapidSX to process real EV motor scrap achieved an overall recovery rate of only 41% in mid-2026—planned capacity does not equal economical mass production.

HyProMag USA​ (Mkango/CoTec system) has licensed the Birmingham HPMS (Hydrogen Processing of Magnet Scrap) technology to Dallas-Fort Worth, with a designed NdFeB processing capacity of nearly 750 t/yr, targeting first production in 2027. ReElement Technologies​ in Indiana uses ligand-assisted chromatography for high-purity separation and has secured US Department of Defense funding for expansion. North American recycling has thus formed a four-corner landscape of “MP closed loop + Noveon short process + Cyclic network + HyProMag technology licensing.”

Europe: Recycling + Heavy Rare Earth Separation Driven by Policy

European companies’ recycling deployments bear the distinct imprint of CRMA policy. The EU has not only set a 25% recycling target but is also preparing to restrict permanent magnet scrap exports by Q2 2026, ensuring NdFeB waste stays within the EU for domestic processors—effectively using administrative means to “feed” European recyclers.

HyProMag​ is the technology benchmark. Its Birmingham Tyseley plant first produced recycled alloy powder in June 2025 and officially opened in January 2026, with single batches >400 kg powder, single-shift capacity of 100 t/yr, and a long-term target of kilo-tonne scale. As of April 2026, it had produced a cumulative 9.2 tonnes of powder and, together with Siemens, showcased a SIMOTICS servo rotor prototype at the Hannover Messe. The German Pforzheim plant starts at 100 t/yr with a permit for 750 t/yr; HyProMag USA is replicating this model in Dallas. The value of HPMS lies in using hydrogen to embrittle waste magnets and directly produce alloy powder, skipping hydrometallurgical separation, but the bottleneck for scaling up is the pace of hard disk pretreatment and the automation of automotive rotor dismantling.

Carester (Caremag)​ is Europe’s most strategically significant integrated recycling and refining project. Its Lacq site in France has secured approximately €216 million in French-Japanese capital (including €106 million from the French government). It will process 2,000 t/yr of end-of-life magnets plus 5,000 t/yr of concentrates, producing 620 tonnes of rare earth oxides (including heavy rare earths dysprosium and terbium). It has signed a long-term agreement with Stellantis and is expected to be completed in autumn 2026, with production starting from late 2026 to early 2027. It is the first heavy rare earth refinery outside China, positioned to provide “de-China-ized” dysprosium and terbium sources for European EVs and wind power.

In the supporting layer, Solvay’s plant in La Rochelle, France, is Europe’s only facility capable of separating all 17 rare earth elements, aiming to supply 30% of Europe’s rare earth demand from recycled material by 2030. Heraeus Remloy​ in Bitterfeld, Germany, processes waste electronics and industrial motors at approximately 600 t/yr capacity. Orano​ opened Europe’s first magnet recycling pilot line in September 2025. Ionic Technologies​ in Belfast produces 99.5% oxides via hydrometallurgy and has received £12 million in UK government DRIVE35 funding to expand to 400 t/yr. The characteristic of European recycling is “policy backstop + division of labor among France, Germany, and the UK,” but there remains a huge gap to the 25% target—current European recycling rates are also below 1%.

Japan and Horizontal Comparison: Steady but Limited in Scale

Japanese companies are taking a low-key route of “end-of-life recycling + hydrogen decrepitation dry process.” Proterial​ (formerly Hitachi Metals) recovers magnets from hard disks and compressors, achieving Nd recovery rates of around 94%. However, limited by the volume of domestic waste magnets, the annual recycled equivalent remains at only a few hundred tonnes, serving more as a strategic backup than a commercial mainstay. Mitsubishi Electric only started tonne-scale trials of dismantling Nd magnets from retired air conditioner compressors in 2026. The characteristic of the Japanese model is not pursuing large scale, but embedding recycling into the existing magnet plant quality system to ensure the certified equivalence of “recycled material = virgin material.”

Common Bottlenecks and Judgments

Overlaying the deployments of overseas companies, the competition in 2025–2026 shows three clear trends: First, the vertical integration camp (MP type) uses primary mining business to cross-subsidize recycling in exchange for OEM long-term contracts. Second, the horizontal network camp (Cyclic type) uses pretreatment nodes and capital to stockpile feedstock, building a “hub-and-spoke” funnel. Third, the regional policy camp (HyProMag, Carester type) feeds on CRMA and national subsidies, but is dragged down by the reality of waste magnet collection rates below 5%.

But all players face the same hard constraint: feedstock. Globally, less than 1% of rare earths come from recycling, and the vast majority of waste magnets still go to landfills or flow to China—which not only has over 90% of refining capacity but also controls the front and back-end waste pools. Cyclic’s 41% recovery rate and Europe’s below-1% rate remind us: the “hundreds of tonnes, thousands of tonnes” disclosed by companies are mostly design capacities or long-term targets, not equivalent to actual qualified output. The USGS 2026 report still does not mention specific tonnages for Western recycling.

Recycling will not replace mining, but it will become a “multiplier” for Western rare earth supply chains—faster permitting, higher heavy rare earth recovery rates, and greater resilience against export controls. Whichever company first builds the bridge of “automated dismantling + batch composition passport + magnet plant re-certification” into its contracts will be the first to cross the “technology valley.”