Plasma-based methods present a highly efficient approach for reclaiming valuable metals and nanoparticles from discarded metal scraps and minerals. In this research, we employed the thermal plasma arc discharge (TPAD) method to synthesize mixed-phase spinal-type magnesium aluminate and magnesium oxide (MgAl2O4/MgO) nanocomposites ranging in size from 10 to 120 nm, using discarded MgAl alloy waste scraps as the primary material. By employing comprehensive characterization techniques such as powder X-ray diffraction (XRD), transmission electron microscopy (TEM), and energy dispersive X-ray analysis (EDS), we successfully confirmed the formation of highly crystalline MgAl2O4/MgO nanocomposites, showcasing a nearly spherical morphology. The surface area of the prepared nanocomposites was investigated using Brunauer-Emmett-Teller (BET) analysis; the values are 51.3 m2g-1. The synthesized MgAl2O4/MgO nanocomposites displayed exceptional photocatalytic activity toward industrial wastewater and commercial dye. Moreover, investigated the storage properties of MgAl2O4/MgO nanocomposites as an electrode material, revealing a good specific capacitance of 379.2 F/g at a current density of 1 A/g, demonstrating pseudocapacitive behavior. These results offer valuable insights into sustainable waste utilization and the development of high-performance nanomaterials for practical applications in various fields.