Magnetic fluids are very stable colloid suspensions of ultrafine magnetic particles, usually magnetite, covered by surface active agent. A nonmagnetic body placed in the magnetic field under a magnetic field gradient experiences a force which expels the body towards a minimum point of magnetic fluid. This principle can be applied to mutual separation of nonmagnetic materials which could not be separated by using conventional sink and float separation system.Many application can be thought by using this separation system. Especially the problems in recycling metal scraps have recently increased importance and it is considered to be very useful to separate. nonferrous metal scraps each other. The equipments have been developed by using water based magnetic fluid which can be regenerated easily plus permanent magnets with yoke as magnetic field generator which are lower in price than electro-magnet. This separation system is about to be put into practical application nowadays, as the cost of water based magnetic fluid is decreasing.