Rare Earth Mineral Recycling Harvests Used Batteries and Decommissioned Hard Drives from Data Centers to Help Offset Tariff-Constrained Supply from China

     Improved recycling capabilities can potentially offset part of the loss of rare earth minerals from China, but it is not a silver bullet. While the U.S. is engaged in an economically dangerous trade war with China, the world’s main supplier and processor of rare earth minerals, there is a need to source these elsewhere. One source is recycling. However, this source is often costly, so the newly created impossible costs from China are giving an incentive to recycling and may lead to breakthroughs that lower costs. These include technological breakthroughs and logistical breakthroughs.

     Redwood Materials, a company founded by Tesla co-founder JB Straubel, is set to recycle used batteries for shared mobility company Lime. Redwood recycled 20 gigawatt-hours of battery material from old cars, scooters, and other products in 2024, enough to produce 250,000 EVs.  Interesting Engineering reports:

“According to Redwood, stripping batteries for relevant elements can help recycle them to make new high-quality batteries that can be used for a wide range of purposes, from cars to phones. Their higher quality ensures they can be recycled further and returned to the supply chain up to 98 percent of the time.”

     Cycle and scooter batteries last about 500 cycles, after which they must be collected and the batteries harvested for materials. Redwood is tasked with recovering and recycling the batteries for rare earth minerals.

     Another pilot project is demonstrating the viability of rare earth minerals, this time from spent hard drives from data centers. As reported by Interesting Engineering:

“In a first-of-its-kind pilot, Western Digital, Microsoft, Critical Materials Recycling (CMR), and PedalPoint Recycling processed nearly 50,000 pounds of decommissioned hard drives and server hardware.”

“Using a new acid-free chemical method, the team extracted rare earth elements like Neodymium, Praseodymium, and Dysprosium, as well as high-purity gold, copper, aluminum, and steel.”

The process is acid-free dissolution recycling (ADR), a technology developed by the Critical Materials Innovation (CMI) Hub. The pilot showed a 90% recovery rate for rare earth minerals and base metals and 80% total materials recovery by mass. The new system for decommissioning Microsoft data center hard drives was deemed a success.

“Tom Lograsso, director of the CMI Hub, praised the team’s rapid development. “Scaling ADR from lab bench to demonstration scale in just eight years is an incredible achievement,” he said.

“With demand for hard drives climbing in tandem with AI and data storage growth, the potential to recover rare earths at scale offers a long-term solution for the U.S.”

     As noted below from a press release by Western Digital, a collaborator in the pilot project, the current recycling rate for REEs and other materials is low, less than 10%. That is likely to increase soon.

“In a multi-party pilot program, Western Digital (Nasdaq: WDC), in collaboration with Microsoft, Critical Materials Recycling (CMR) and PedalPoint Recycling has taken a major step toward closing that loop. Together, the companies transformed ~50,000 pounds of shredded end-of-life HDDs, mounting caddies and other materials into critical high-value materials, all while significantly reducing environmental impact. This pioneering process of creating a new advanced sorting ecosystem with an eco-friendly non-acid process not only recaptures essential rare earth elements but also extracts metals like gold (Au), copper (Cu), aluminum (Al) and steel, feeding them back into the U.S. supply chain, supporting industries that rely on these resources—such as electric vehicles, wind turbines, and advanced electronics. When scaled worldwide, this new recycling process could return a lot of recovered rare earths to the U.S. supply pool, drastically reducing the need for virgin material mining detrimental to people and planet. Today, most primary production (>85%) of REEs occurs outside of the U.S. and the current domestic recycling rate for REEs is very low (<10%)”

Of course, the project, and other potential projects like it, will decrease carbon emissions relative to mining and processing these materials and shore up the U.S. supply chain for them. The Critical Materials Innovation Hub is a U.S. DOE Energy Innovation Hub led by Ames National Laboratory, seeded by a $10 million grant from the DOE to develop solutions for securing REE and other critical mineral supply chains.

     Another collaborator in the project, Pedal Point Recycling, specializes in shredding components to two-inch-by-two-inch squares. The company recycles solar panels and electronics, with the goal of reducing the amount of e-waste. The world produces an estimated 62 million tons of e-waste per year. Thus, there is also a clear need from a waste-reduction perspective to recycle these materials.

  

 

References:

 

US extracts rare earths from hard drives, strikes blow to China’s dominance. Aamir Khollam. Interesting Engineering. April 21, 2025. US extracts rare earths from hard drives, strikes blow to China’s dominance

At-Scale, Hard Disk Drive Rare Earth Material Capture Program Successfully Launched in the United States. Western Digital. April 17, 2025. At-Scale, Hard Disk Drive Rare Earth Material Capture Program Successfully Launched in the United States | Western Digital

Tesla co-founder’s firm to recycle old batteries for rare earths to beat China curbs. China is countering US tariff with a ban on export of certain rare earth metals to the US. April 15, 2025. Ameya Paleja. Tesla co-founder’s firm to recycle batteries from EVs amid China curbs

Critical Materials Innovation Hub. Ames National Laboratory. Critical Materials Innovation Hub | Ames Laboratory

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