You can bet that manufacturers recycle the liberated hole punches. But they differ in how they recycle. Forest products giant International Paper, for example, boils more than 90 percent of its paper byproducts to power the very plant that manufacturers looseleaf paper. But more commonly, "Hole punches," as well as other paper trim or waste is baled and sold for scrap. It is and has always been recycled (for approximately 100 years), usually winding up in chipboard, boxes, etc.
Many other paper manufacturers that mostly produce toilet paper, facial tissue, paper towels, napkins, etc. are made from 100% recycled paper fiber.
Bet you never considered that the missing dots in your notebook paper made their way into your toilet paper!
http://www.ehow.com/about_5398882_history-loose-leaf-paper.html
