The recycling of rare earth elements (REE) from end-of-life REE based products is an environment friendly proposition. Waste Sm-Co based permanent magnet generated during machining is a good source for both Sm and Co. In the present study a simpler process of acid leaching at 80 °C followed by solvent extraction, oxalate precipitation and calcination is described for producing pure Sm2O3 and Co3O4. With either 10 vol% H2SO4 or 15 vol% HCl at 80 °C more than 95% Sm and Co are leached in 1 h. Extraction of Sm from sulphate leach liquor with TBP or Aliquat 336 was poor. Although extraction with TOPS-99 is quantitative but Sm from sulphate leach liquor precipitated as Sm2(SO4)3·8H2O. The chloride leach liquor at an initial pH of 2.5 and with 1.2 mol/L TOPS-99 shows requirement of 4-stages at A:O = 3:2. Stripping with oxalic acid precipitates Sm-oxalate which is calcined at 800 °C to produce Sm2O3. Co3O4 is recovered from the raffinate through oxalate precipitation followed by calcination at 450 °C.