The effect of recycling over a mining oligopoly

In a view of switching from a linear to a circular economy, recycling plays a fundamental role. While the literature on the effect of recycling over the mining activity is focused on a monopoly, here we only deal with a mining oligopoly, which better reflects realistic market conditions. Our results show a decreasing mining output with the presence of recycling and unexpectidly a greater market power. Nevertheless, we point out the need for recylers to benefit from a minimum recycling efficiency technology to enter the market. A second technologic threshold also allows the recyclers to lower the oligopolistic market power. In this case of extreme foreclosure, since the mining output rises with the number of firms, a cooperation is necessary to prevent the entry of recycling. In terms of strategy, an horizontal integration could strengthen their position in the upstream industrial process and would also represent a good way to step forward to the so-called circular economy.