There is now a path for rare earths found inside discarded air conditioners to return as industrial raw materials. The Ministry of Climate, Energy and Environment will sign a memorandum of understanding this afternoon at the Metropolitan Resource Circulation Center in Cheoin-gu, Yongin, with LG Electronics and the Resource Circulation Governance.
The three parties will jointly advance a pilot project to separate and recover rare-earth permanent magnets from refrigerant compressors in discarded air conditioners and refrigerators. After the agreement, First Vice Minister Geum Han-seung is scheduled to visit the center site and inspect the process of removing magnets from discarded appliances.
Under the project, the Resource Circulation Governance will detach the refrigerant compressors and rotors from air conditioners and refrigerators, while LG Electronics will demagnetize and separate the permanent magnets from the rotors. The recovered magnets will be used in the development of technologies for turning them into raw materials for new magnets. The three institutions have agreed to build a domestic circular-use system aimed at internalizing the rare earth supply chain and strengthening resource security.
The annual target is more than 40,000 air conditioners and refrigerators, with an expected recovery of about 1,600 kilograms.
Inside the refrigerant compressor, the rotor contains about 120 grams of permanent magnets. Their extremely strong magnetism has made manual removal difficult, which has been the main obstacle. After copper is separated, the remaining rotors have been sent to scrap metal with the magnets still attached, leaving the rare earths unused.
The key to solving this bottleneck is demagnetization technology. By treating magnets with heat or a magnetic field to remove their magnetic force, separation becomes possible. The equipment developed by LG Electronics will undergo demonstration testing through a regulatory sandbox until May 2028.
Rare earths are core raw materials for high-performance magnets used in electric vehicle drive motors, wind turbines, and robots. Because mining and refining are concentrated in a small number of countries, supply chains have repeatedly been shaken by export restrictions. South Korea has virtually no domestic mines and has depended on imports.
That is why the idea of “urban mining” emerged. It is the concept of extracting metals scattered in discarded appliances and electronics instead of ore. Since collection systems for waste appliances are already in place, the barrier to securing raw materials is relatively low. The fact that manufacturers have long shared recycling costs under the extended producer responsibility system also supports the model.
Expanding the scale reveals the potential. If this method were applied to the estimated 3 million discarded appliances generated nationwide each year, about 120 tons of waste permanent magnets could be recovered. That would not fully replace imported volumes, but it would serve as a meaningful buffer if supply were disrupted.
However, the magnets removed from discarded appliances must go through one more step before becoming industrial raw materials.
There is a gap between recovery and reuse. It has been pointed out that magnets used for a long time may have altered compositions or mixed impurities, making them difficult to put directly into new products. That is why raw-material conversion technology development has been set as a goal of this project.
Views also differ on economic viability. There is concern that if the costs of separation, demagnetization, and refining exceed the price of imported raw materials, the project will be difficult to sustain. In contrast, others argue that because rare earth prices have fluctuated with geopolitical factors, a stable domestic supply source itself must be valued.
There are also calls to address regulatory gaps. Current recycling standards are centered on scrap metal, making the specific task of removing magnets unprofitable for processing companies. Analysts say that without incentives to handle the more labor-intensive process, the pilot project’s results may not spread to the field.
This agreement shows that the focus of the circular economy is shifting. Discussions that once centered on reducing waste and increasing recycling rates are now linking with industrial strategy under the concept of resource security. Recycling is moving from environmental policy into supply-chain policy.
The division of roles between the public and private sectors is also notable. A cooperation model has been established in which the recycling agency controls the collection system, the manufacturer provides the technology, and the government sets the rules. Opening a demonstration space through a regulatory exception can be read as an effort to reduce delays that often arise when technology moves ahead of regulation.
The real asset left by the pilot project may be data rather than recovery volume. Only by identifying where costs leak out and where quality declines can the next design be created. The two-year verification period is the time to draw that map.
First Vice Minister Geum Han-seung said, “In order to return rare earths from discarded appliances to industrial raw materials, close cooperation between companies and the government is essential, from the recovery of waste permanent magnets to raw-material conversion,” adding that the ministry will expand recovery and recycling systems and promote regulatory improvements and technological development. The road from 40,000 units to 3 million units has several knots to untie.
▲ The first knot is regulation. Based on the pilot project results, the government plans to prepare institutional measures such as improvements to recycling standards. The field will move only if magnet separation is recognized as a recycling outcome and if a mechanism is established to reflect recovery unit costs in processing expenses. Establishing a new item for critical mineral recovery within the waste-appliance rules, which have been focused on managing hazardous substances, is the starting point.
▲ The second is the remaining half of the technology. Reprocessing to restore the composition of recovered magnets and reuse processes that use magnets as whole units follow different paths. Both routes need to be demonstrated together, with a design that separates them by quality grade. How well domestic refining facilities are in place will determine whether recovered materials can actually be turned into raw materials.
▲ The third is to go back to the product-design stage. Products designed with disassembly in mind can sharply reduce recovery costs. Changing compressor structures to make magnet separation easier and recording magnet composition information in product histories would make later dismantling much simpler. The product passport approach introduced in Europe for batteries and electronic products is cited as a reference.
▲ The fourth is the market. If there is no channel for domestic magnet manufacturers and finished-goods companies to buy recovered materials, inventories will simply pile up. Measures under discussion include reflecting the use of recycled materials in public procurement or arranging purchase agreements to absorb initial volumes steadily.
▲ The last is expansion of scope. The more recovery is extended from air conditioners and refrigerators to washing machines, electric vehicle motors, and wind power equipment, the closer the volume gets to economies of scale. As electric vehicle adoption grows and end-of-life motors begin to flood the market, putting recovery facilities in place in advance becomes a race against time.
Digging up discarded resources again is slower and more labor-intensive than opening a new mine. Even so, the reason for pursuing this path is clear. When supply chain doors close, only the circular loops that were prepared in advance will remain.