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Assessing the Potential Value of Rare Metals in Urban Mines: A Comparative Look at Korea and Japan

Assessing the Potential Value of Rare Metals in Urban Mines: A Comparative Look at Korea and Japan

JUNG Ho-Sung, KIM Hwa-Nyeon, CHOI Myeong-Hae

Sept. 20, 2011

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Originally released on July 14, 2011

As demand increases for high tech products and as China makes moves to "weaponize" its resources, interest in rare metals has grown in Korea. "Rare metals" refers to metals that either scarce, or plentiful, but difficult or expensive to extract. Demand for these "vitamins of industry" is high, and is expected to expand in the future. However, the rising cost of extraction, geopolitical risks and resource weaponization are causing increasing difficulties in securing stable supplies. Due to these factors, development of overseas mines and securing of rights is becoming increasingly inadequate to secure continued access.

Under these circumstances, "urban mining" that extracts rare metals from discarded products rather than natural mines has risen as a viable alternative to secure access to rare metals. "Urban mining" refers to the extraction of metals from discarded consumer electronics or automobiles for reuse after recycling. Though Korea already has recycling of metals, including scrap iron and precious metals, many rare metals are sent to the incinerator or put in landfills. Accordingly, to activate urban mining, it is first necessary to estimate the amount of rare metals that are recoverable from urban mines. At present, rare metals in Korea are concentrated primarily in automobiles, and amount to 82,000 tons, equivalent to 1.8 trillion won at 2011 prices. Rare metals can also be found in consumer electronics and office equipment, and among these, twelve kinds of electronic products can provide at minimum 38,000 tons, with a potential value of 98.03 billion won. This is equivalent to 12.3 times the total amount imported into the country. In 2020, environmentally friendly vehicles will account for nearly 20% of all vehicles, and demand for secondary batteries and small digital devices like smartphones will increase, expanding the potential value of rare metals in urban mines to a minimum of 33 trillion won.

To realize the future value of this 33 trillion won, it is critical that obstacles that block expansion of the recycling of rare metals be removed. The government must expand recycling systems, and preemptively secure discarded resources, while private businesses must work with the government to improve their technological capabilities for extraction. In particular, a selection and concentration strategy is needed for typical resources that lead to accumulation of rare metals. In other words, it will be effective to concentrate investment in items like secondary batteries, which are rich repositories of rare metals in themselves, and digital devices that are dense with rare metals, and are moreover comparatively easy to process and extract from.

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