A pilot program by Western Digital, in collaboration with Critical Materials Recycling, and PedalPoint Recycling, is experimenting with new ways to extract valuable rare earth elements and metals from obsolete servers provided by Microsoft’s US data centers.
The group said it is using an “advanced sorting ecosystem with an eco-friendly non-acid process that not only recaptures essential rare earth elements but also extracts metals like gold, copper, aluminum, and steel, feeding them back into the US supply chain.” It said that the pilot recovered about 90% of the elemental and rare earth materials from the material. The process was developed at the Ames National Laboratory Critical Materials Innovation Hub.
The statement noted that hard disk drives use other rare earth elements as well, including neodymium, praseodymium, and dysprosium, which are “prized for their magnetic properties to help HDDs precisely read and write data.” Yet, it said, “traditional recycling methods recover only a fraction of these valuable materials, often missing rare earths entirely.”
ROI calculation has changed
Extracting such value has always been technologically possible, but it never made financial sense because of the tiny amount of such materials in any one server, which one analyst estimated might be worth anywhere from a few dollars to no more than $30.
But given the changing global economic situation, the ROI calculations have changed. Besides the tariff war, this includes moves by China to halt the export of bismuth, which might hold the key to future faster and more efficient semiconductors. Bismuth powered semiconductors still include gold and silver and other elements, so US executives want to preserve as much of them as possible.
“This has not been done for years, and certainly not at this scale,” said Melody Brue, VP and principal analyst at Moor Insights & Strategy. “For companies, it minimizes dependency on environmentally damaging mining, and creates a sustainable, cost-effective domestic supply of critical resources for industries like electronics, renewable energy, and electric vehicles.”
Other analysts echoed Brue’s sentiments and applauded the program — or at least, the stated goals of the program.
“This is a smart way to keep things going while there is so much geopolitical tension,” said Alvin Nguyen, senior analyst with Forrester. “With limited supplies, it makes a tremendous amount of sense.”
‘Canary in the coal mine’
Jeremy Roberts, senior director at Info-Tech Research Group, said that although this move is inherently a good thing, it is also likely a harbinger of even worse times ahead.
“I think this move says more about uncertainty around trade and China’s decision to saber rattle about rare earths in response to tariffs than about any meaningful change in technology,” Roberts said. “It does demonstrate that the hyperscalers see something concerning on the horizon. It might be more of a canary in a coal mine than something tactically meaningful to most customers.”
Roberts added that he also sees this as a result of the industry’s changing economics.
“This type of recycling hasn’t historically been common. I suspect that this is due to the relative cost of extracting the materials versus acquiring non-recycled materials,” Roberts said. “Just like it’s not profitable to extract oil from tar sands unless the price of a barrel reaches a certain point, it’s not profitable for Microsoft and its partners to extract rare earths [from equipment being recycled] unless they anticipate price increases or other disruptions.”
Gartner analyst Autumn Stanish also welcomed the move, but she was a bit more cautious.
“How this will impact the IT hardware supply chain is unclear as of today, especially with the whiplash tariff announcements. However, we encourage IT leaders to investigate this topic and prepare some alternative sourcing or supply routes in advance,” Stanish said. “Significant amounts of rare earths are imported as permanent magnets embedded in finished goods. This applies to every single type of IT hardware, from servers to PCs to network switches.”
Stanish also stressed that she has a lot of questions that the announcement left unanswered, such as how the companies will use the recovered materials and whether the pilot will be expanded.
“This seems, based on the public information, far from the volume and scale to achieve the independence and carbon savings potential presented,” she said.
Potential financial benefit
The move is mostly positioned as an industry effort to be sustainable and slightly more viable; there appears to be no direct benefit to the CIO’s budget. But Forrester’s Nguyen did optimistically point to a potential IT financial benefit.
Given the massive volume of servers and other devices that age out of use every year, CIOs might be able to negotiate a payment from the recycler for sharing the metals and rare earths, Nguyen said.
“When you are getting rid of tens of thousands of devices every year and sometimes hundreds of thousands, negotiate,” Nguyen said. “You may be able to say ‘Give me X amount for this service, this device, this component.’”
Data security preserved
Other variables in this equation include privacy, cybersecurity and compliance concerns, given the data stored within those devices. But Western Digital and others said that should not be a problem.
“The enterprise companies destroy drives for data security,” said Rhownica Birch, director of global operations product sustainability at Western Digital. “Shredding drives still allows precious metals and rare earths to be recovered via this advanced recycling ecosystem.”
Moor’s Brue agreed, and offered more detail.
“Extracting [rare earth elements] can be done after shredding. Shredding storage devices is an effective way to ensure data is irretrievable because the physical destruction makes recovery impossible,” she explained. “After shredding, magnets and other separation techniques are used to efficiently extract and preserve rare earth elements and other valuable materials for recycling.”
The shredding process is done by a certified service provider which will follow a chain of custody and then issue a certificate of destruction to the enterprise. That would make this Microsoft/Western Digital test, Brue said, “a completely safe method that meets data protection regulation requirements.”
Source:: Network World