The Bureau of Mines has used colloidal solutions of magnetite in a magnetic field to segregate nonmagnetic materials such as nonferrous scrap metals and to concentrate precious minerals. Conventional magnetic separation relies on the inherent magnetic susceptibility of the material to be separated and may be designated as magnetic separation of the first kind. When the medium of separation rather than the separated particles are made magnetizable, a new system of gravity separation results. In this new magnetic separation of the second kind, a magnetic fluid rather than air or water acts as the separation medium. The same force that attracts magnetic objects in separations of the first kind also attracts the entire separation medium in separations of the second kind, thereby creating a reactionary force of equal magnitude in the opposite direction. This force, sometimes called the levitation force, can be made to segregate nonmagnetic particles in a flowing stream according to their specific gravity. The technique has been applied to segregate nonferrous metals from automobile and appliance shredders and mixed scraps. The system has also been used to upgrade diamondiferous jig concentrates from certain river gravels in order to facilitate the sorting and recovery of their diamond content.