Recently it has been proved that molding of defect-free components of various commercial alloys of magnesium can be carried out succesfully when small amounts of CaO are added to the melt, making unnecessary the use of SF 6 coverage. In the case of AZ alloys, this process also remarkably improves their mechanical properties not only by the greater cleaning of alloys but also by the formation of CaAl 2 phase. This work, part of the Green project Metallurgy ( http://www.green-metallurgy.eu ) funded by the European Union (LIFE+2009), studies the influence of different CaO additions on the microstructure and mechanical properties of AZ31 Eco-Mg alloy. The alloy was processed by a conventional route involving extrusion of as-cast rods as well as by a powder metallurgy route (PM) using chips as starting material. The objective was to analyze the viability of recycling machining chips to manufacture components for the automobile industry and transportation in general, because of its low cost and environmental impact. It has been demostrated that alloys processed from chips exhibit the highest tensile stress values, close to 320 MPa.