A Startup Claims to Have a Solution That Could End China’s Monopoly on Rare Earth Elements: Hard Drives

In today’s era of technology and the transition to renewable energy and electric cars, rare earth elements have emerged as highly valuable commodities. They’re essential to many industries. However, there’s a significant concern: China dominates both the mining and production of rare earth metals. What’s more, the country isn’t hesitant to leverage this dominance as a tactic in the ongoing technological and trade conflicts.

While Western nations contemplate their next steps in pursuing these critical resources, some companies are already focusing on recycling to obtain rare earth elements from various sources. For example, that old hard drive sitting in your drawer could be a treasure trove of these valuable materials.

From crisis to opportunity. Rare earth elements refer to a group of 17 minerals. They’re used in the manufacture of components for electric car batteries, precision medical instruments, loudspeakers, and wind turbines, among many other applications across virtually all sectors. While extracting these elements from the ground poses fewer challenges, refining them is more problematic due to the strict pollution regulations in Western countries.

As a result, much of this refining work has been outsourced to China, which now accounts for nearly 90% of global production. Rare earth elements are so important that China frequently uses its exports as leverage in trade disputes with the West. This was evident in the Ukraine war, where U.S. support was partially conditioned on access to rare earth elements.

However, every crisis presents an opportunity.

Old hard drives. Since rare earth elements can’t be produced, why not obtain them through recycling? While scientists struggle with plastic recycling, they’ve made better progress with other materials. Rare earth elements present a particularly viable opportunity.

HyProMag, a startup founded by staff from the University of Birmingham in the United Kingdom, is dedicated to this cause. Specifically, it focuses on recycling hard drives.

Although traditional hard drives have been overshadowed by faster and more affordable SSDs, they remain valuable as external drives and components for NAS systems. Notably, hard drives contain components made from rare earth elements, particularly the magnets crucial for their function.

Recycling. Gavin Mudd, the director of the UK Critical Minerals Intelligence Center, highlights that the European country imports between 5,000 and 10,000 tons of rare earth magnets annually in the form of finished products and components. However, only about 1% of that total is recycled. He notes that this situation isn’t unique to the UK. In fact, it reflects a similar trend seen in other industrialized nations. “We need to look at future domestic production where we can… [and also] look at recycling,” Mudd said.

This is where HyProMag’s technology becomes relevant. The company claims its technique enables it to extract magnets containing rare earth elements comprising 10% to 15% of the hard drive’s weight. It utilizes a large drum that can hold up to a ton of waste at a time. Once filled, the drum is sealed, and pure hydrogen is introduced into it.

The hydrogen atoms penetrate the cracks in the magnets, causing them to break apart and separate from the surrounding material. This process takes between four and eight hours. At the end of the process, a powder mainly composed of neodymium (the primary component of the magnets) settles at the bottom of the container. Other materials, such as steel, nickel, and aluminum, are also separated and can be recycled. The resulting material is then ground down, and an alloy is produced that can be transformed back into magnets.

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Different approaches. Cyclic Materials is another company that has emerged in the recycling of rare earth elements. CEO Ahmad Ghahreman told the Financial Times that the company’s recycling method is superior to the traditional “magnet-to-magnet” approach. Instead of merely separating magnets from iron and steel, its technology breaks down each element’s component.

Ghahreman explains that this method allows companies to utilize the recovered rare earth elements in various applications, not just as magnets. He likens the two approaches to recycling a pizza. He said, “When you recycle pizza with our technology, you go from pizza to flour, salt, pepper, all the other ingredients that we use. With magnet-to-magnet technology, you go from pizza to dough.”

Ambitious projects. Despite his competitive tone, Ghahreman acknowledges that both methods are valid and “cost effective.” In 2024, Cyclic Materials produced 100 tons of rare earth oxides, and the company hopes to increase that to 600 tons by the end of this year. Moreover, it plans to open another plant in the U.S. with a capacity of 1,200 tons per year and expand to facilities in Canada and Europe by 2028.

For its part, HyProMag plans to produce between 25 and 30 tons per year in its initial phase but aims to expand to 350 tons with a new plant in Germany. The startup also plans to establish another facility in Texas to produce 1,000 tons of alloys per year.

In short, both companies aim to advance the recycling of rare earth elements.

Recycling is crucial. HyProMag founder Allan Walton emphasizes that this technology “is a way of stripping out very large quantities of rare earths and creating a domestic supply.” Recycling rare earth elements has been a topic of discussion for years, but it’s always posed significant challenges.

Several countries are now actively pursuing it. While production remains difficult, investing in recycling rare earth elements is crucial to reducing dependence on China, especially since these materials are used in nearly everything today.

Images | Art Wall - Kittenprint | HyproMag

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