1. "Rare Earth Retaliation? It's All Part of the Plan!" vs. "Is That Even Possible?"
Last weekend, the Global Times, a Chinese state-run media outlet, published an article stating, "Japan's plan to recycle rare earth minerals from air conditioner units is unfeasible and, in fact, reveals its weaknesses." The headline alone makes it clear that they are looking to disparage Japan. The article addresses a rare earth recycling project announced by Mitsubishi Electric, which was subsequently reported by Japanese media outlets such as the Nihon Keizai Shimbun. This is the press release in question: Japan has established what it calls a "complete circular system," where it extracts rare earth elements from home appliances and reintroduces them into its own products for the first time. As China tightens export controls on rare earth-related technologies and items, citing potential military applications, Japan's supply chain for high-performance permanent magnets has been placed on high alert. Stepping in as a savior is Mitsubishi Electric, a major Japanese home appliance and defense company. In collaboration with specialized material and refining firms like Shin-Etsu Chemical and Eco Advance, Mitsubishi Electric has built a "closed-loop recycle" system that is completed entirely within Japan. The specific process is as follows: First, a partner of Mitsubishi Electric separates the "compressor," a core component, from discarded air conditioner outdoor units collected under the Home Appliance Recycling Law. In the second step, a company called Eco Advance safely removes high-performance magnets from the motors inside the separated compressors. In the third step, Shin-Etsu Chemical, a leading Japanese chemical company, melts these magnets down to cleanly separate and refine four core rare earth components, such as neodymium. The core of the plan is for Mitsubishi Electric to then use these recovered rare earth elements to manufacture new air conditioners. According to the press release, Mitsubishi Electric expects this technology to allow it to self-supply as much as 35% of the specific rare earth elements needed for air conditioner production. If successful, it would be an ideal model of an "urban mine," extracting important resources from waste appliances without having to dig up the ground. Consequently, Japanese media have celebrated this as an "innovative breakthrough to counter China's weaponization of resources."
2. China's Basis for Skepticism
However, China's Global Times views this rare earth recycling project with a highly skeptical and critical eye. They do have their reasons. First and foremost, China points to cost-effectiveness. The amount of rare earth elements in a single air conditioner is only a few grams to several dozen grams. The cost of collecting, dismantling, and chemically refining these would be incomparably higher than importing processed minerals from China. Therefore, the Global Times pointed out, "This method is difficult to apply to mass production systems and is far too small in scale to change the landscape of the entire market." The second reason is China's confidence in its own rare earth ecosystem, which encompasses both mining and refining. China controls more than 90% of the supply chain not only for global rare earth mining but also for the "refining" stage, which makes these minerals usable. This is an ecosystem built over many years, absorbing the costs of large-scale environmental pollution and labor. The article is based on the calculation that Japan's level of recycling a few air conditioners can never match the unit costs of the massive rare earth ecosystem China has established. There also appears to be an intent to keep Japan in check. As mentioned earlier, Mitsubishi Electric is not just a company that makes civilian home appliances; it is a key Japanese defense firm that manufactures fighter jets, missiles, and radar systems. China believes that Japan is using "civilian recycling" as a pretext to actually build up its military and security self-sufficiency. Thus, they are applying pressure by arguing that it is a cost-ineffective recycling project and that no matter how many rare earths are extracted from air conditioners, they only yield light rare earths, not heavy rare earths.
[Interview] Han Yo-seop / Senior Researcher, Korea Institute of Geoscience and Mineral Resources: (Then how do you obtain heavy rare earths?) "We are also researching heavy rare earths at our institute, and it is extremely difficult. Obtaining samples is very difficult, and they are not traded. Also, when dealing with foreign entities, there are quite a few cases of being scammed. There are many instances where we buy 1 ton or 500kg of what is claimed to be raw ore, only to find almost nothing after analysis. Rather than from such sources, we are currently focusing on wind power, electric vehicles, or motors used in physical AI, which utilize heavy rare earths. It is true that China has a tight grip on heavy rare earths."
3. Is 'Urban Mining' Possible for Korea? But...
Japan's arduous efforts toward self-sufficiency and China's resource hegemony competition to coolly suppress them provide very significant implications for South Korea. I consulted with Dr. Han Yo-seop of the Korea Institute of Geoscience and Mineral Resources. He noted that while China is correct when it comes to cost-effectiveness, such projects are not undertaken based on the ratio of input costs to results. In normal times, recycling waste appliances might seem like pouring water into a bottomless pit with minimal effect, but if the supply chain is completely paralyzed due to diplomatic conflicts or wartime situations, resources cannot be obtained no matter how much money is offered. Therefore, he emphasized that like Japan, we must build the technological foundation and an "urban mining ecosystem" to recycle a certain percentage of core resources from waste, even if it costs money now, so that we do not become a national hostage.
[Interview] Han Yo-seop / Senior Researcher, Korea Institute of Geoscience and Mineral Resources: "Countries other than China are doing this for the sake of securing supplies. They are doing it now because of stockpiling, but in fact, it is not a project intended to beat China in the industry. From China's perspective, it is correct to say that, because China has such low unit costs and abundant ore. But for smaller countries like us, we have no choice but to do it. We have to possess it."
As important as importing minerals is the source technology that allows them to be distributed and used across various industrial sectors. The reason Japan is able to endure China's pressure is that global material companies like Shin-Etsu Chemical hold world-class refining technology. Of course, South Korean state-run research institutes like the Korea Institute of Geoscience and Mineral Resources have already developed source technologies to separate and refine rare earths from waste magnets or minerals at high purity. We have caught up significantly compared to the leading nation, Japan. However, the problem is that there is no so-called "scale-up" to expand this to a factory level. To build large-scale refining plants, one must bear massive capital costs along with the expenses for treating the enormous amounts of wastewater and environmental pollutants generated during the refining process. Because companies have been reluctant to invest due to a lack of economic feasibility, there are almost no large-scale commercial refining facilities in Korea. While there are companies that produce the final permanent magnets, the middle stage is missing. Ultimately, even if we have the technology, we are currently structurally vulnerable, forced to import raw materials from China or use semi-finished products primarily processed in Japan. This is why experts are pointing out that we must make bold investments in core material technologies such as battery recycling and waste motor refining technology. We should not just be spectators to the rare earth war between China and Japan. If we do not have resources to mine, making technology our mine is the way for us to survive.
Reported by Choi Go-un | Produced by Shin Hee-sook | Video by Choi Deok-hyun | Video Editing by Na Hong-hee | Graphics by Lee Soo-min | Produced by SBS Digital News
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