Silicon (Si) has been perceived as a promising next-generation anode material for lithium ion batteries (LIBs) due to its superior theoretical capacity. Despite the natural abundance of this element on Earth, large-scale production of high-purity Si nanomaterials in a green and energy-efficient way is yet to become an industrial reality. Spray-drying methods have been exploited to recover Si particles from low-value sludge produced in the photovoltaic industry, providing a massive and cost-effective Si resource for fabricating anode materials. To address such drawbacks like volume expansion, low electrical and Li+ conductivity and unstable solid electrolyte interphase (SEI) formation, the recycled silicon particles have been downsized into nanoscale and shielded by a highly conductive and protective graphene multilayer through high energy ball milling. Cyclic voltammetry and electrochemical impedance spectroscopy measurements have revealed that the graphene wrapping and size reduction approach have significantly improved the electrochemical performance. It delivers an excellent reversible capacity of 1,138mAhg−1 and a long cycle life with 73% capacity retention over 150 cycles at a high current of 450mAg−1. The plentiful waste conversion methodology also provides considerable opportunities for developing additional rechargeable devices, ceramic, powder metallurgy and silane/siloxane products.