In recent years, the magnesium alloy is frequently used for automobile components, computer parts and digital camera parts. However, a lot of magnesium chips from the manufacturing process are dumped as the industrial waste, because the surface area per unit volume is wide and the magnesium machine chips are easy oxidized during the fusion process. However, the magnesium chips will be able to be recycled by the compaction forming to reduce the oxidation. In the paper, the compaction forming of the magnesium machine chips is attempted by the addition of asphalt. For the compact obtained, the check of crack, the strength test and the microstructure observation of the compact are performed. Furthermore, the fusion experiment of the formed compact into aluminum melt is examined to apply as the aluminum alloy additive.