Current methods for preparing magnetic composites with carbon nanotubes (MCNT) commonly include extensive use of treatment with strong acids and result in massive losses of carbon nanotubes (CNTs). In this study we explore the potential of taking advantage of the inherent magnetic properties associated with the metal (alloy or oxide) incorporated in CNTs during their production. The as-received CNTs are refined by applying a permanent magnet to a suspension of CNTs to separate the high-magnetic fraction; the low-magnetic fraction is discarded with the solvent. The collected MCNTs were characterized by a suite of 10 diffraction and spectroscopic techniques. A key discovery is that metallic nano-clusters of Fe and/or Ni located in the interior cavities of the nanotubes give MCNTs their ferromagnetic character. After refinement using our method, the MCNTs show saturation magnetizations up to 10 times that of the as-received materials. In addition, we demonstrate the ability of these MCNTs to repeatedly remove atrazine from water in a cycle of dispersion into a water sample, adsorption of the atrazine onto the MCNTs, collection by magnetic attraction and regeneration by ethanol. The resulting MCNTs show high adsorption capacities (> 40 mg-atrazine/g), high magnetic response, and straightforward regeneration. The method presented here is simpler, faster, and substantially reduces chemical waste relative to current techniques and the resulting MCNTs are promising adsorbents for organic/chemical contaminants in environmental waters.