Coated magnesium is increasingly applied in consumer goods. After their useful life the goods are processed, creating coated scrap which is currently poorly recycled. This leaves a gap in the utilization cycle and a resource unused. Closure of the cycle in a sustainable manner requires quantification of the effect of coatings on the degree of recycling of magnesium alloys. For this purpose exergy analysis is used. This tool incorporates changes in both mass and quality of materials during recycling. Exergy analysis requires thermodynamical knowledge about the physical and chemical interaction between coating, magnesium and salt flux during melting and their effects on the products. EMF cell, solubility and lab-scale melting experiments are used to quantify this. Combination of the results with known systems enables determination of the impurity's activity in metal and salt. Subsequently the exergy is calculated. Unfavourable coating components are identified and presented in a decision table. (c) 2007 Elsevier Ltd. All rights reserved.