Based on the differences in the magnetic susceptibility of materials, a down-flowing electromagnetic bed were investigated for the separation between magnetic and non-magnetic fine powders in a pneumatic conveying system. A new feeder which utilizes local fluidization and vibration was developed for conveying powders to the electromagnetic bed. The performance of the feeder has been evaluated using pulverized coal of which average diameter is 52μm and sieved coals which were classified by size. Local fluidization and vibration were found to be effective to minimize interparticle adhesion forces. As the gas velocity for local fluidization increased, the discharging rate increased only slightly when the gas velocity is below a critical value with respect to particle size, but increased sharply when it is above the critical value. The discharging rate increased with the increases in particle size, vibrating acceleration and gas velocity for local fluidization. In the test for electromagnetic separation, grinding dust(G/D) and shot dust were used as magnetic fine powders and pulverized coal and sand as non-magnetic ones. Down-flowing annulus separator was found to be effective for continuous removal and recovery of magnetic and non-magnetic fine powders in a pneumatic conveying system. In the continuous operation, the formation of magnetic chains in the core could be minimized by shortening on/off intervals of electromagnetic sets. As the magnetic field intensity, the opening ratio in the core and the magnetic susceptibility increased, the removal efficiency of magnetic fine powders increased while the recovery efficiency of non-magnetic fine powders decreased due to interparticle adhesion forces.