Japan: Asaka Riken (5724): Analysis of the Urban Mining Business
An Extremely Aggressive “Offensive Management Decision”
On October 14, 2025, in Tokyo Stock Exchange, shares of Asaka Riken surged more than 20% at one point, hitting a new year-to-date high, driven by soaring precious metal prices.
This rally is also tied to U.S. President Trump’s remarks earlier today, which sparked speculative inflows into rare-earth related stocks, where Asaka Riken is viewed as a key player.
The company is a resource recycling manufacturer, specializing in recovering and refining valuable metals such as gold, silver, and platinum group metals from discarded electronic devices and industrial waste using proprietary high-efficiency technologies in Japan. In resource-scarce Japan, Asaka Riken’s business model is recognized as having national strategic importance, contributing to a circular economy and supply chain stability.
Technological Strengths and Uniqueness of the Urban Mining Business
(1) Core technologies in existing businesses: High-purity extraction via solvent methods
Asaka Riken’s flagship precious metals recycling business primarily sources materials from defective circuit boards and scrap generated during the production of quartz oscillators, semiconductors, and connectors. Its solvent extraction technology enables selective separation of target metal ions from impurities, achieving extremely high purity.
In collaboration with the Japan Atomic Energy Agency, the company successfully refined recovered metals to 99.999% purity (five nines). This allows resale of recovered materials into the domestic market at high added value.
The firm also possesses selective leaching technology, which dissolves only specific metals from complex components by adjusting chemical formulations. This high selectivity enables rapid and reliable recovery of valuable metals from intricate electronic parts.
These proprietary processes are protected by numerous patents, ensuring both efficiency and quality in recycling while raising high barriers to entry for competitors.
(2) New business focus: Establishing environmental superiority in LiB recycling
In recent years, Asaka Riken has been prioritizing recycling of lithium-ion batteries (LiBs), where demand is surging due to the growth of electric vehicles (EVs).
“LiB to LiB” Strategy: Recover lithium, cobalt, and nickel from spent LiBs and feed them back into new LiBs. This closed-loop “battery-to-battery” model ensures stable raw material supply while reducing environmental burdens from mining.
Proprietary wet process: Unlike conventional pyrometallurgical (smelting) methods, Asaka Riken employs a non-calcination crushing pretreatment followed by solvent extraction. This reduces CO₂ emissions and waste residues significantly, with lower energy use compared to dry processes.
Importantly, it enables efficient recovery of lithium itself—traditionally difficult with smelting.
Alignment with National Policy and Economic Security
Asaka Riken’s business is tightly linked to Japan’s economic security strategy and efforts to secure stable supplies of critical minerals.
Rare earth supply chain role: In June 2025, Japanese stocks including Asaka Riken hit upper limits after reports that the government would propose a U.S.–Japan cooperation package on rare earth mining and recycling, seen as countering China’s dominance in supply.
Economic Security Promotion Act compatibility: Its LiB recycling aligns directly with securing “critical minerals” and “storage batteries,” designated as strategically important materials.
The company announced in 2023 that it was the first Japanese manufacturer to achieve the EU’s 2031 lithium recovery rate target (80%) under its Battery Regulation.
Strategic Significance of Expanded Capital Investment
To advance its LiB recycling business, Asaka Riken raised planned investment in its Iwaki plant from about ¥2.2 billion to roughly ¥7.0 billion (scheduled to start operations in 2026).
Relative to the company’s current market cap of ~¥8.4 billion (post-surge), this ¥7.0 billion investment is an extremely aggressive, offensive management decision. Financed through a mix of internal funds and debt, it signals strong conviction in the business’s success and likely contributed to today’s sharp rally.
Business Strategy Perspective
This capital spending increase is closely tied to Asaka Riken’s early-2025 announcement of a recycling agreement with Prime Planet Energy & Solutions (PPES, now Toyota Battery Co.), an EV battery joint venture.
The collaboration goes beyond waste processing, embedding Asaka Riken into the supply chain of LiB manufacturers, ensuring stable raw material procurement and building a closed-loop “LiB to LiB” ecosystem.
Armed with advanced resource recovery technology and environmental advantages, Asaka Riken aims to establish itself as a global leader in circular resource businesses. While it currently benefits from favorable precious metal markets, its medium- to long-term corporate value will hinge on the success of its bold LiB recycling strategy.