00:00 Japan's 'Rare Earth Recycling' project criticized by China
02:39 Why is China criticizing it?
04:59 What about South Korea?

1. Japan's 'Rare Earth Recycling' Project Criticized by China
Hello, I am Choi Go-un, a reporter with a keen interest in minerals who began my tenure as the Beijing correspondent this July. Last weekend, the Chinese state-run media outlet Global Times published an article on this very topic. Based on an interview with the director of a Beijing-based advanced technology research institute, the headline itself asserts that "Japan's plan to recycle rare earth minerals from air conditioner units is unrealistic and, in fact, reveals its weaknesses." The tone of the headline makes it clear that they are disparaging Japan. The article discusses a 'rare earth recycling' project announced by Mitsubishi Electric, which has been covered by Japanese media outlets such as the Nihon Keizai Shimbun. This is the press release in question; it claims that Japan has established a so-called 'complete circular system' that extracts rare earths from waste 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. Mitsubishi Electric, a major Japanese home appliance and defense company, has stepped in as a savior. By partnering with material and refining specialists like Shin-Etsu Chemical and Eco-Advance, Mitsubishi Electric has built a 'closed-loop recycling' system that is completed entirely within Japan. The specific process is as follows: First, Mitsubishi Electric's partners separate the 'compressor,' a core component, from waste air conditioner outdoor units collected under the Home Appliance Recycling Law. In the second step, a company called Eco-Advance safely removes the high-performance magnets from the motors inside the separated compressors. In the third step, Japan's leading chemical company, Shin-Etsu Chemical, melts these magnets to cleanly separate and refine four key rare earth components, such as neodymium. The core of the plan is for Mitsubishi Electric to then use these recovered rare earths to manufacture new air conditioners. According to the press release, Mitsubishi Electric expects that this technology will allow it to self-supply as much as 35% of the specific rare earths needed for its air conditioner production. If successful, it is close to an ideal model of 'urban mining,' where important resources are extracted from waste appliances without digging into the ground at all. Consequently, Japanese media have celebrated this as an "innovative breakthrough to counter China's weaponization of resources."

2. Why Is China Criticizing It?
However, China's Global Times views this rare earth recycling project with a highly skeptical and critical eye. Naturally, there are reasons for this. First and foremost, China points to 'cost-effectiveness.' The amount of rare earths extracted from a single air conditioner is only a few grams to several tens of grams. The costs associated with collecting, dismantling, and chemically refining these materials would be incomparably higher than importing processed minerals from China. Therefore, the Global Times pointed out that "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 'mining' and 'refining' capabilities. 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 materials usable. This is an ecosystem built up over many years by bearing the costs of large-scale environmental pollution and labor. The article implies that Japan, at the level of recycling a few air conditioners, can never match the unit prices of the massive rare earth ecosystem China has established. There is also 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 company that manufactures fighter jets, missiles, and radars. China believes that Japan is using 'civilian recycling' as a pretext to secretly build up its own military and security-related self-sufficiency capabilities. Thus, they are applying pressure through rhetoric, claiming that the recycling project has low cost-effectiveness 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 (KIGAM): (Then how do we obtain heavy rare earths?) We are also researching heavy rare earths at the institute, and it is extremely difficult. Obtaining samples is very difficult. They are not traded. And 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 relying on such sources, what we are currently doing most is focusing on wind power, electric vehicles, or three-phase motors used in physical AI, which utilize heavy rare earths. It is true that Japan and China have a tight grip on heavy rare earths.

3. What About South Korea?
The competition for resource hegemony between Japan's arduous efforts toward self-sufficiency and China's cold attempts to suppress them provides a very significant implication for South Korea. I consulted with Dr. Han Yo-seop of the Korea Institute of Geoscience and Mineral Resources, who noted that while China is correct in terms of cost-effectiveness, such projects are not undertaken based on a simple comparison of input costs versus results. While recycling waste appliances might seem like pouring water into a bottomless pit and may have minimal effects during normal times, if the supply chain is completely paralyzed due to diplomatic conflicts or wartime situations, resources cannot be obtained regardless of how much money is offered. Therefore, he emphasizes that like Japan, we must build the technological foundation and an 'urban mining ecosystem' in advance to allow for the self-circulation of a certain percentage of key resources from waste, even if it costs money now, so that the country does not become a hostage.

[Interview] Han Yo-seop / Senior Researcher, Korea Institute of Geoscience and Mineral Resources (KIGAM): Countries other than China are doing this for the purpose of securing supplies; they are doing it because of their stockpiling policies in case China, for example, plays games. It is not actually a business intended to beat China in the industry. It is true from China's perspective to say that, as China has such low unit costs and abundant ore, but smaller nations have no choice but to do it. They have to possess it.

As important as importing minerals is the original technology that allows them to be distributed and used across various industrial sectors. The reason Japan is able to withstand China's pressure is that global material companies like Shin-Etsu Chemical possess world-class refining technology. Of course, South Korean state-run research institutions like the Korea Institute of Geoscience and Mineral Resources have already developed original 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 we lack the so-called 'scale-up' to expand this to a factory level. Building a large-scale refining plant requires massive capital, as well as the ability to bear the costs of 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 South Korea. While there are companies that produce the final permanent magnets, the middle stage of the supply chain is empty. Ultimately, we are left with a structural vulnerability where, even if we have the technology, we have no choice but to import raw materials from China or import semi-finished products that have undergone primary processing in Japan. This is why experts are pointing out that we must make bold investments in key material technologies, such as battery recycling and waste motor refining technology. We cannot just sit by and watch the rare earth war between China and Japan. If we have no resources to mine, making technology our mine is the path to our survival.

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