Rust powder in A/C lines

Right now we have the engine and trans out and the engine bay was just painted.

I have most of the A/C lines out and I'm cleaning the outside of them up. I noticed that this orange powder keeps coming out. Then I shook the A/C drier and it sounded like it had sand in it.

I thought it might be dried up refrigerant?? But seems more like rust and was attracted to a magnet. I want to get the A/C running again but not sure if some parts like the drier need replacing.


Thanks for any help on this.