*** 9760706 Oder This Small Business Innovation Research Phase I project addresses the dry magnetic separation of magnetically similar particles with otherwise dissimilar surface characteristics. Separation of unburned carbon from pulverized-coal combustion fly ash will be used as an example. A novel laboratory scale continuous separator will be built to establish the proof-of-concept of using surface properties to enhance selectivity in the dry magnetic separation of micron sized particles. Separation and concentration of carbonaceous particles found in micron-sized pulverized-coal combustion fly ash will be evaluated. The quantity and quality of low carbon fly ash which can be prepared by the method will be determined. Phase I will include testing of fly ash from power plants with and without low NO burners, and a conceptual evaluation to assess the feasibility, costs and benefits for the novel method. A nominal 200 to 1000 pounds per hour pilot unit is planned for Phase II. The market for carbon removal is being driven by low NO burners which result in high carbon levels in the fly ash. Use of the magnetic-based technology will minimize fly ash disposal costs and maximize returns for sales of the by-product.. The estimated total market for fly ash equipment sales is $155,000,000. ***