In this study, a closed loop two-stage leaching process has been experimentally and theoretically established for the selective dissolution of metals from electrode material of spent Ni-MH batteries. In the first step, baking parameters, such as temperature, acid concentration, and duration were optimized as 300 degrees C, 2 mL H2SO4 for 1.5 g of cathode powder, 90 min. The thermodynamic feasibility of the process ascertained the spontaneous formation of water-soluble sulfates of nickel, zinc, and rare earth elements during the acid baking. Post-baking, a two-stage leaching was performed for leaching of different metals present in the baked material. In first stage leaching with water, 91.73% Ni, 94% Zn, 91% rare earth elements were extracted with a low recovery of 36.5% Co, 22.1% Fe, 23.5% Mn at 75 C in 1 h. Owing to the low recovery of Co and Mn, 2nd stage leaching was performed using NaHSO3 in H2SO4 at 95 degrees C for 1 h, improving extraction to Co (55%) and Mn (74%). The overall recovery of the metals was found to be 98.2% Ni, 91.4% Co, 98% Zn, 97.8% Mn and 96% rare earth elements. The two-stage process (baking and leaching) outperforms direct sulfuric acid leaching of cathode powder due to lower acid consumption and its selectivity of metals. (C) 2017 Elsevier Ltd. All rights reserved.