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Cable recycling is an important source of high-grade secondary copper. Unfortunately, for every kg of copper produced, the cable recycling process also creates some 2 kg of residue: a complex mixture of PVC insulation, ill-liberated cable parts, very fine copper wire and a minor amount of other materials. This paper investigates two scenarios for this residue in terms of Life Cycle Assessment: land filling versus an innovative process that recycles over 90 mass% of the residue by means of a precise separation on density into a clean PVC fraction and a fine copper product. In order to compare the two scenarios and account for the quality issue of recycled materials, the land filling option is extended with the production of copper and PVC from primary resources, in quantities that represent the same market value as the recycled materials in the recycling scenario. The LCA study performed shows as the introduction of the MDS process down-line the traditional process for the cables waste recycling has very promising results. Nevertheless the impacts generated by the innovative system could be even lower using a different energetic mix (more renewable energy) and scaling up the system in an industrial installation (less energetic consumption per unit of waste processed). Assessing innovative technologies in recycling using the life cycle approach could represent a further drive for the transition from traditional mining to urban mining: highlighting the environmental hotspots and identifying the greenest processes among different options, the LCA provides additional information for both the designing and the policy making processes in order to stimulate innovation in the recycling sector. Improvement of methodological aspects in LCA is needed in order to deal with specific issues in recycling like material downgrading and market perception of secondary goods. The LCA study on cables waste recycling is an interesting practical application of the market price substitution methodology for the secondary materials avoided impacts accounting. Undoubtedly market distortions (such as taxation or subsidies) may cause prices of secondary materials not properly reflecting their quality, leading to a wrong estimation of the avoided environmental impact. Anyway down-cycling and market acceptance of secondary materials are something LCA should deal with especially when the study refers to well-established recycling market.