The utilization of Waste Electrical and Electronic Equipment is a hot spot in environmental protection field presently and the resource utilization of cable wastes is an important subject. An enormous amount of electrical cable is disposed of as scrap each year. In order to recycle the valuable copper wires, cable granulator technique is used widely. However, one of the shortcomings of this technique is it has serious tool wear. In order to better understand the reason for tool wear, this paper simulates the stress and strain distribution in the cutting tool and copper during the cutting process in cable granulator by finite element method. The result shows that a tensile stress region, which is the main reason for blade tipping, appeared in the upper blade. Besides, the tensile stress in the right side of upper blade is higher than that in the left side. Therefore, in order to extend the life of cutter, we suggest using different materials in different stress zone to manufacture cutting tool. After the cutter was worn out, the right side of the blade can be renovated using material with well tensile performance through overlaying welding, as well as the left side of the blade can be renovated by material with high red hardness, high wear resistance, and high compression strength through overlaying welding. This method can reduce the consumption of precious metals and raise the utilization rate of materials.© (2010) COPYRIGHT SPIE--The International Society for Optical Engineering. Downloading of the abstract is permitted for personal use only.