How Recycling Could Upend the Rare Earth Metals Market

Summary

Podcast Summary: "How Recycling Could Upend the Rare Earth Metals Market"

WSJ Tech News Briefing | January 30, 2026
Host: Katie Dayton
Guest: Ed Ballard, WSJ Climate Change and Energy Transition Columnist

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Overview

This episode examines how recycling obsolete technology could help the U.S. reduce dependence on China for rare earth metals—elements essential for electronics, electric vehicles, wind turbines, and more. The episode unpacks the challenges, economic viability, and emerging innovators in the recycling industry that aim to reclaim these critical resources from old gadgets, rather than relying solely on costly and time-consuming mining.

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Key Discussion Points and Insights

1. The Geopolitics of Rare Earth Metals (05:51)

• Context: China currently mines 60% and refines over 90% of the world’s rare earth metals.
  • "[China] mines 3/5 of the world's metals and has more than 90% of the world's capacity for refining them." — Katie Dayton (05:51)
• Rising Tensions: Recently, China used rare earth exports as leverage in trade disputes with the U.S., threatening supply chains for the tech industry.
  • "Beijing last year used rare earth export restrictions as a weapon in the trade war with the U.S." — Katie Dayton (05:51)
• Strategic Response: The U.S. is searching for new ways to secure rare earths, with recycling of end-of-life tech as a promising path.

2. Why Recycling, and Why Now? (06:38)

• Faster Than Mining: Opening new rare earth mines in the U.S. is a regulatory and logistical challenge; it takes more than a decade.
  • "So to permit and develop a mine... that can take a decade or more." — Ed Ballard (06:38)
• Existing Materials: Tech products reaching end-of-life (old electronics, E-bikes, hard drives) are an untapped resource.
• Challenges: Historically, rare earth recycling hasn’t been cost-effective due to:
  • Low quantities of rare earths per device
  • Difficulty separating magnets/metals from plastics and other components

3. How the Recycling Process Works (08:09)

• Featured Company: Cyclic, a startup, claims a cheaper and more effective method for rare earth extraction from e-waste.
  • Cyclic seeks out discarded electronics, pays to acquire them from recyclers, and focuses on components like magnets in hard drives.
  • "Using kind of conventional mechanical recycling approaches to remove the rare earth magnets themselves from the surrounding gadgets. And then after that, use basically chemistry, bathing the metal in a kind of bath of chemicals to dissolve the rare earths..." — Ed Ballard (08:09)
• Example: Old data center hard drives contain rare earth magnets in their corners; Cyclic slices these out and processes them for reuse.

4. Can Recycling Replace Mining? (09:47)

• Volume Limitations: Recycling can't meet total demand—it can only recover metals already in circulation.
  • "You can only recycle what's already out there, right?... So the amount you can recycle is always going to be less than what's already there. But that doesn't mean it can't be a... significant contribution to US Demand." — Ed Ballard (09:47)
• Capture Issues: Many devices with rare earth elements languish unused in drawers or landfills, reducing the recyclable supply.

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Notable Quotes and Memorable Moments

• "[The U.S.] can gain greater control of its own destiny, not by mining, but by recycling the kinds of technology most of us would consider to be junk."
  — Katie Dayton (05:51)
• "It's never been economically viable to recycle the rare earths... you're talking about often little bits of equipment... and it's just been too fiddly to get these materials out."
  — Ed Ballard (06:58)
• "All of the aluminum in your drinks cans gets recycled. We're good at recycling steel... but it's never been economically viable to recycle the rare earths."
  — Ed Ballard (07:09)
• "[Cyclic has] deals with recycling companies to take those hard drives, slice off the corners which contain the magnets, and then process those to remove the rare earths so that they can be refined once again into new metal."
  — Ed Ballard (08:29)

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Important Timestamps

• 05:51: Introduction to U.S.-China rare earth supply chain concerns
• 06:38: Ed Ballard explains why recycling is faster than mining and the historical challenges
• 08:09: Description of Cyclic’s recycling process for rare earth magnets from hard drives
• 09:47: Discussion on the volume limitations of recycling versus mining

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Tone and Final Thoughts

This episode is brisk, pragmatic, and focused on industrial innovation and U.S. economic resilience. The tone is explanatory and sober, emphasizing both the promise and the limitations of tech recycling for rare earth recovery.

For listeners: The episode provides a solid primer on why your “junk” electronics could have national strategic value—a must-listen for those tracking tech supply chains and green innovation.

Transcript

[A]

AI is transforming industries, but the data centers powering it require more energy and water than ever. At the break, join Christophe Beck, chairman and CEO of Ecolab, for insights on using water effectively while safeguarding this critical resource for future generations.

[B]

Welcome to Tech News briefing. It's Friday, January 30th. I'm Katie Dayton for the Wall Street Journal. Meta and Microsoft have both spent billions on artificial intelligence in recent months. And now that investment is finally reflected in a rising share price for one of them. We're taking a look at why the stock market fortunes of these two tech powerhouses are diverging so sharply. Then a small group of companies are betting that your old E bikes and hard drives could help combat China's chokehold on the rare earth metal industry. Stay with us to find out how it could work. But first, Microsoft and Meta have been in the doghouse with investors recently. They're the two biggest spenders when it comes to AI at a time when the market is starting to question just when all that investment will pay off. But this week, something shifted. Meta reported record quarterly sales and saw its stock price climb. But it was a different story for Microsoft. Here to break it down for us is WSJ Heard on the street columnist D. Dan Gallagher. So, Dan, earlier this week we had earnings reports from Meta and Microsoft that both slightly exceeded Wall Street's expectations for their December ended quarter. But the markets reacted very differently to each company.

[C]

What happened in this case, I boil it down to simplicity versus complexity. Meta. 98% of their business is advertising. They've been able to like, use AI in ways to like, improve that, drive more engagement, better targeting and so forth. And that's showing up in their growth. And they projected a really strong essentially growth acceleration for the first quarter, which kind of sold the message that AI is actually helping them. And it gave them essentially a pass on what's been this spending. All of the companies have been spending a ton on AI. Meta is spending the most relative to its revenue and it's going to spend even more. Like this year is probably going to spend more than half of its revenue on Capex, which is an obscene amount for these companies. But the stock is up because investors think AI is actually paying off for them.

[B]

And what about Microsoft?

[C]

Microsoft has this like more complex business model where they do software for large corporate customers. For consumers, there's these mix of like cloud contracts. They even sell things like Xbox. That's in that mix too. So it's a pretty complicated setup. And they're trying to use AI in a number of ways. One, they're trying to develop internally to make their own processes better. They're powering AI computing for companies like OpenAI, which is a very big customer for them. And they're also trying to drive people like us to use things like Copilot at work. Copilot is their AI software that we can use to run spreadsheets, make PowerPoints, all these sorts of things. So they have this kind of more complex task. And one thing the recent report showed is that all these companies don't have as much AI computing capacity as they'd like to have. They talk about being capacity constrained, and Microsoft has had to make that different parts of that capacity available for different parts of its business. And they intentionally decided not to put as much capacity towards its cloud business. That's the most closely watched by investors. So the cloud revenue growth wasn't quite what investors wanted to see. And that's why you're seeing the stock sell down a lot on that report. Driving AI adoption is just trickier for them because ultimately it's going to depend on how many businesses adopt AI, use it in a way that drives business to Microsoft, and that's just a longer thing to do.

[B]

I'd love to hold these two stocks up against Alphabet, which has seen a huge boost to its share price in the last six months. Why is the Google firm outperforming Meta and Microsoft to such an extent?

[C]

Google's had a lot of things go its way, especially during 2025. A big thing that helped the stock was the company essentially beat the government's efforts to break it up. The stock was really underwater before that. So once the company kind of won those cases and won some very favorable rulings, the stock really started to take off. And then their latest Gemini model ended up testing really, really well, scored really high on all these benchmarks, got a lot of strong buzz for, like, surpassing OpenAI and ChatGPT. And the fact that they were able to train that model on chips that Google itself designed also was a big help for them because it kind of showed just the technical prowess this company has. So Google had a lot of things helping its narrative over the last six months that really helped. It stuck.

[B]

That was WSJ columnist Dan Gallagher. Which company's results are surprising you this earnings season? If you're a listener on Spotify, leave us a comment with your thoughts. Coming up, your obsolete tech may be worth more to the US than you'd expect. We're breaking down. Why? That's after the break.

[A]

How can enabling Smarter Water Management help AI scale responsibly. Here's Christoph Beck, chairman and CEO of Ecolab.

[D]

All water of the earth that we can drink is 35 miles wide. That's all we've got for the whole planet. So we'd better find ways to reuse water. That's especially true for AI. But here's the good news. With technology that can reuse water in that process of the chips manufacturing and the technology that we bring is ultimately at every step of the process, in the cheap manufacturing to reuse it.

[B]

Rare earth metals, elements that power a ton of the modern gadgets we use every day usually come from China. The country mines 3/5 of the world's metals and has more than 90% of the world's capacity for refining them. That's not usually a problem. But as geopolitical tensions ramp up between China and the US Unfettered access to rare earth metals is no longer guaranteed. Beijing last year used rare earth export restrictions as a weapon in the trade war with the U.S. some believe the U.S. can gain greater control of its own destiny, not by mining, but by recycling the kinds of technology most of us would consider to be junk. Our WSJ colleague Ed Ballard is here to explain more. Ed, talk us through this recycling option that has been presented. How does that work?

[E]

The basic idea is it's faster than a mine. So to permit and develop a mine after you've determined that there are enough rare earths in a certain place to make it worth building a mine, that can take a decade or more. And so that is really not a fast way if you're trying to rapidly build up your own secure supply chain of rare earths. And so the idea behind the recycling is that you have all of this existing equipment out there in the world that is coming to the end of its life and that is only going to increase that can be harvested. We already recycle all sorts of other metals. Like most of the aluminum in your drinks cans gets recycled. We're good at recycling steel. Most of the US Steel is already recycled, but it's never been economically viable to recycle the rare earths. And that's because, for a start, the actual volumes are pretty small. And also because you're talking about often little bits of equipment where the rads are bound up with other materials, bits of plastic, other metals, and it's just been too fiddly to get these materials out. It just hasn't been economically viable. But now with this emphasis on building up a domestic supply chain, that's sort of increasing the interest in this potential path to improving the supply.

[B]

Can you give us an example of one company in this space and how this recycling process works for them?

[E]

The main startup in the story that we've written is a company called Cyclic. And what they are saying is that they have come up with a cheaper way of doing this. So to take a step back. So what currently happens is when you throw something away, it goes to a recycler and some of the metals are already harvested, but the rare earths themselves probably end up in this waste material called slag. And the idea is that now Cyclic come along and say, no, don't forget about those bits. We will buy those. We will pay more for this equipment. And then using kind of conventional mechanical recycling approaches to remove the rare earth magnets themselves from the surrounding gadgets. And then after that, use basically chemistry, bathing the metal in a kind of bath of chemicals to dissolve the rare earths that you can then refine again. To take one example of how this actually works in practice, one of the big sources of old electronics that they're using is old hard drives from data centers which contain little tiny magnets in the corner of each one. And Cyclic has deals with the recycling companies to take those hard drives, slice off the corners which contain the magnets, and then process those to remove the rare earths so that they can be refined once again into new metal. There are various different approaches out there, but the key is who can do this in a cost effective way.

[B]

And if these companies are successful, do they anticipate that they really could replace the volumes accrued from mining with recycling?

[E]

I would say they're probably. It's not going to be enough on its own to meet all of, say, U.S. demand, because if you think about it mathematically, you can only recycle what's already out there, right? So a lot of, like you think of all the old phones that you might have sitting in a drawer at home, each of those has got a tiny little rare earth magnet in them. And so all of lots of this stuff is never going to be recycled. It's just going to sort of languish. So the amount you can recycle is always going to be less than what's already there. But that doesn't mean it can't be a kind of significant contribution to US Demand.

[B]

That was WSJ climate change and energy transition columnist Ed Ballard. And that's it for Tech News Briefing. If you're a listener on Spotify, be sure to leave us a comment today's. Show was produced by Julie Chang. I'm your host, Katie Dayton. Jessica Fenton and Michael Lavalle wrote our theme music. Our supervising producer is Katie Ferguson. Jessica Fenton is our technical manager. Our development producer is Aisha Al Muslim. Chris Inslee is the deputy editor and Falana Patterson is the Wall Street Journal's head of News Audio. We'll be back later this morning with TNB Tech Minute. Thanks for listening.

[A]

How are data center operators working to improve sustainability and water savings at every stage of the data center lifecycle? Here's EcoLabs Christophe Beck with some thoughts.

[D]

The Mach 7 or the Mach 4 are the ones that are really so focused on high tech are the most forward looking. They have the means, they have the mindset, they have the passion for innovation and they're really open to try new things as well because everything is new with AI and with that technology as well. I think even if we're not where we wanted to be with that industry right now, we will be ahead in the next few years because innovation that's coming up right now is working much better than we thought. And it's really thinking in circular ways being in a data center or in a microchip manufacturing plant.

[A]

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[E]

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