Microsoft starts recycling rare earth elements from data centre hardware

Microsoft is part of a new collaboration to recover and recycle rare earth elements from discarded hard disk drives collected from its data centres.

The programme launched last week in the US by Microsoft, Western Digital, Critical Materials Recycling and PedalPoint Recycling aims to reduce hard drive manufacturers’ reliance on imported virgin rare earth elements and make data centre supply chains more sustainable.

More than 85% of rare earth elements are mined outside the US, and China is estimated to be responsible for 70% of global production –  with import tariffs now standing at 145%.

Rare earth elements like Neodymium, Praseodymium and Dysprosium are an essential component of hard disk drives, themselves a key part of cloud data centre infrastructure.

New recycling method

Recycling methods so far only managed to recover a fraction of these valuable materials, but together, the four companies in the new programme have created a new advanced sorting ecosystem with an eco-friendly non-acid process that recaptures around 90% of essential rare earth elements, but also extracts other metals like gold, copper, aluminum and steel.

These minerals can then be fed back into the US hardware supply chain, supporting industries such as electric vehicles, wind turbines, and advanced electronics, while reducing their environmental impacts. Less than 10% of rare earth elements used today in US manufacturing comes from recycled sources.

So far, the companies have transformed around 50,000 pounds of shredded end-of-life hard disk drives (HDDs), mounting caddies and other materials collected from several Microsoft data centres in the US into “critical high-value materials”, according to a statement released by the programme.

Advancing a circular digital supply chain

"This is a tremendous effort by all parties involved. This pilot programme has shown that a sustainable and economically viable end-of-life management for HDDs is achievable," said Chuck Graham, Corporate Vice President, Cloud Sourcing, Supply Chain, Sustainability, and Security at Microsoft. 

"HDDs are vital to our data centre infrastructure, and advancing a circular supply chain is a core focus for Microsoft. We're proud to be a part of this initiative with our partners, creating opportunities to reuse and recycle materials, reduce waste, and lower carbon impacts across the industry."

Based on lifecycle analysis calculations, recycling hardware is estimated to reduce the greenhouse gas emissions associated with rare earth elements by 95%, compared to acquiring virgin materials from traditional mining and processing practices.

95% lower emissions rare earth elements

This is also because, by keeping the materials within the US, the programme minimises transportation emissions.

“This initiative sets a new standard for end-of-life data storage management,” said Jackie Jung, vice president of Global Operations Strategy and Corporate Sustainability at Western Digital. “In today’s rapidly evolving data landscape, innovation must extend beyond a device’s lifecycle. Western Digital and its partners are leading the way, transforming retired storage devices into critical resources that power our future – while protecting the planet and strengthening the economy and US supply chain. This project isn’t just a milestone; it’s a blueprint for large-scale, domestic recycling of essential metals and materials that will drive sustainable progress for years to come.”