Pandemic, electronics boom, materials shortages
Korea's Urban Mining Industry, Slow Growth or Countermeasures to Supply and Demand Shortages
Batteries and solar panels are approaching their aging stage, so fostering them is urgent


As time spent at home increases due to the spread of telecommuting and remote education, sales of home appliances are continuing to boom. Samsung Electronics and LG Electronics’ sales and operating profit in the home appliance sector in 2020 increased by more than 30% compared to 2019. Domestic shipments of desktop PCs also increased by 16% in 2020 compared to 2019, thanks to the non-face-to-face special. This is the first boom in 10 years.

Demand is solid, but supply is not keeping up. Sony and Microsoft's 9th generation consoles, the PlayStation 5 and Xbox Series X, are in short supply and cannot be easily purchased even if you have the money. This is because the CPU and GPU supply shortage continues.

The semiconductor shortage is most urgent in the automobile industry. The shortage of automotive semiconductors has also lowered the operating rates of finished car and electrical equipment manufacturers. Foundry companies such as TSMC, Samsung Electronics, and Intel have predicted that this supply shortage will last up to two years. The supply problem of semiconductor and substrate materials is also a time bomb that can explode at any time.

South Korea is a resource-poor country, and relies on imports for more than 90% of its mineral resources, so it is influenced by resource-rich countries such as the United States, China, Russia, Canada, and Australia. The situation is even worse for rare metals such as palladium, which are mined in small quantities worldwide.

Urban mining refers to a form in which industrial raw materials, such as mineral resources, are widely distributed in small quantities around people in the form of products or waste, quantitatively equivalent to the scale of a mine. The urban mining industry is an industry that re-supplies mineral resources as industrial raw materials through the process of “collection – separation/classification – selection – smelting/refining” of used products or business by-products.

Mineral resources are usually mined from underground, but some are already mined and accumulated around us in the form of products or wastes, rather than reserves. In 2010, Samsung Economic Research Institute estimated that the potential value of rare metals in urban mines was 33 trillion won. In fact, from 1 ton of mobile phone waste, about 400g of gold, 3kg of silver, and 100kg of copper can be extracted.

◇ Domestic urban mining industry, growth slows due to lack of manpower, technology, and systems

If the urban mining industry develops, it can extract resources from waste and increase the value of old products that are meaninglessly discarded, and it can achieve positive functions such as stabilizing national resource supply and protecting the environment. However, the domestic urban mining industry is not growing at all. In 2014, even POSCO withdrew from the industry, leaving behind a loss of 100 billion won.

The reasons for the slow development of the urban mining industry in Korea include ▲inefficient waste resource collection environment ▲lack of personnel for separation and classification ▲lack of sorting technology ▲lack of institutional support, etc. These shortcomings are even more evident when compared to Japan, a leading country in urban mining.

Japan has been supporting resource recycling since enacting the “Act on Promotion of Effective Use of Resources” in 1991 and the “Basic Act on the Formation of a Circular Society” in 2000. In addition, organizations such as JOGMEC, which handles metal resources, and JBRC, which handles secondary battery work, took charge of recycling, which reduced Japan's final disposal of waste from 73 million tons at the end of the 20th century to 28 million tons in 2010.

In Korea, the only law related to urban mining is the 'Waste Management Act', which focuses on the disposal of 'waste'. Since each local government handles the collection of scrap home appliances, there are not many large scrap companies. Taking advantage of this, the Japanese government is importing high-quality scrap home appliances from all over Asia by strengthening export regulations on scrap home appliances and simplifying import procedures.

In addition, according to the Korea Recycling Resources Association, half of domestic urban mining companies are small businesses with less than 10 employees. Recently manufactured products are moving toward increasing the purity of materials and the degree of material combination in order to increase efficiency. This leads to difficulties in separating and sorting resources, which limits the scope of activities of small businesses.

Urban mining protects the environment while destroying it. Waste that is left untreated can weather and cause soil contamination. Also, if the sorting process is done using low-level technology that separates resources by burning, it is difficult to prevent the discharge of hazardous chemicals, and there are difficulties such as conflicts with local governments in selecting the site for recycling plants.

In Korea, various solar panel distribution policies have been implemented since the early 2000s to popularize solar power generation. The average lifespan of a solar panel is 20 to 30 years, and experts are concerned that a large number of aging solar panels will be thrown away as waste. Solar panels contain heavy metals such as lead, copper, and aluminum, and separating them requires a lot of labor and electricity. In addition, the separation process emits hazardous chemicals.

Currently, automakers such as GM, Ford, Volkswagen, and Kia are jumping into the electric vehicle market, and the demand for batteries is also skyrocketing. However, batteries need to be replaced frequently for efficiency, and the benefits of using used batteries are not yet significant, and the technological maturity is still limited to extracting lithium and cobalt.

As demand for electronic products increases, the amount of waste electrical appliances, along with solar panels and electric vehicle batteries, is expected to increase significantly in the next 5 to 10 years. Therefore, it is time for comprehensive government support for the urban mining industry to stabilize the supply of resources and establish a circular economy. In addition, technology to reduce the emission of environmental pollutants generated during the recycling process is also urgent.