The economic potential of the global Heavy Rare Earth Element deposits in comparison to the high-class Chinese deposits 16.09.2013 Joint Meeting GV and DMG, Tübingen Institut für Mineralogie und Lagerstättenlehre Friedrichs, Meyer & Stoltz

Introduction Market structure for REE Basket Price & Criticality of REE Comparison of Heavy REE deposits Demand & Supply Conclusions Institut für Mineralogie und Lagerstättenlehre Friedrichs, Meyer & Stoltz

Heavy Rare Earth Usage Friedrichs, Meyer & Stoltz Institut für Mineralogie und Lagerstättenlehre Friedrichs, Meyer & Stoltz

Rare Earth Element Market - System Institut für Mineralogie und Lagerstättenlehre Friedrichs, Meyer & Stoltz

REE Projects worlwide Longnan, Xunwu, Xinfen, Changting, Chongzuo Lofdal Browns Range Source: Technology Metals Research, October 2012. At the moment, around 440 REE projects worldwide are active and are operated from around 270 different companies in 37 different countries outside China. Institut für Mineralogie und Lagerstättenlehre Friedrichs, Meyer & Stoltz

Price Development for Dy, Eu & Tb Prices of Heavy Rare Earth Oxide have a very high volatility; they range between 100 US-$ and around 5,000 US-$. Institut für Mineralogie und Lagerstättenlehre Friedrichs, Meyer & Stoltz

Exemplary Calculation of the Basket Price Calculation Basket Price: (FOB China 99,9% (La-Oxid) * In-situ wt% (La-Oxid)) +…+ (FOB China 99,999% (Y-Oxid) * In-situ wt%(Y-Oxid)) = 72 ($/kg) Institut für Mineralogie und Lagerstättenlehre Friedrichs, Meyer & Stoltz

Rare Earth Index – Global HREE Projects Source: Technology Metals Research, August 2013. Institut für Mineralogie und Lagerstättenlehre Friedrichs, Meyer & Stoltz

Criticality Matrix for “Green Technologies” Short-Term (Present–2015) Criticality Matrix Medium-Term (2015–2025) Criticality Matrix Source: US Department of Energy, 2012 Institut für Mineralogie und Lagerstättenlehre Friedrichs, Meyer & Stoltz

Basket Price FOB China for REE deposits in US-$/kg Critical Rare Earth Oxide Values Deposit CREO Basket Price FOB China for REE deposits in US-$/kg Longnan 1 2519.19 70.79 Longnan 3 2400.61 60.74 Longnan 4 2057.49 45.50 Hastings 884.86 66.17 Longnan 2 822.65 60.13 Browns Range-Wolverine 814.24 69.19 Lofdal 704.26 69.67 Mean Ganzhou 345.90 57.86 Changting 266.17 67.03 Chongzuo 245.45 61.52 Xinfen 2 218.34 56.45 Xinfen 1 205.62 60.01 Kutessay II 128.65 63.98 The CREO value is defined as the sum of Nd, Pr, Eu, Dy, Tb divided by the sum of La & Ce Institut für Mineralogie und Lagerstättenlehre Friedrichs, Meyer & Stoltz

Comparison of ROW HREE deposits & Chinese IAC Eu2O3 (normalised wt%) Tb4O7 (normalised wt%) Dy2O3 (normalised wt%) Y2O3 (normalised wt%) Hastings 0.14 1.14 8.85 53.28 Longnan 1 0.30 1.34 8.83 58.30 Browns Range-Wolverine 0.44 1.26 8.57 55.63 Lofdal 0.94 1.11 8.07 57.70 Longnan 2 0.03 0.90 7.48 64.10 Longnan 3 0.37 1.13 64.97 Kutessay II 0.23 1.55 6.14 26.73 Longnan 4 0.10 5.30 56.20 Changting 0.93 0.82 5.03 27.79 Chongzuo 0.72 0.76 4.27 26.85 Xinfen 1 0.71 0.77 4.10 25.10 Xinfen 2 0.68 3.71 24.26 Xunwu 1 0.51 0.46 1.77 10.07 Xunwu 2 Institut für Mineralogie und Lagerstättenlehre Friedrichs, Meyer & Stoltz

Forecast Supply & Demand for RE in 2016 Rare Earth Oxide Demand @ Supply @ 150 - 170,000 tpa REO 180 - 210,000 tpa REO Cerium 60 - 70,000t REO 75 - 85,000t REO Neodymium 25 - 30,000t REO 30 - 35,000t REO Europium 625 - 725t REO 450 - 550t REO Dysprosium 1,500 - 1,800t REO 1,300 - 1,600t REO Terbium 300 - 400t REO Yttrium 12- 14,000 t REO 9 - 11,000t REO Deficit 175 t 200 t 150 t 3,000 t Source: Kingsnorth, 2012. Institut für Mineralogie und Lagerstättenlehre Friedrichs, Meyer & Stoltz

Conclusion Browns Range and the Lofdal deposit have a high HREE potential, therefore, they can become an alternative to the southern Chinese IAC deposits in 2016. Market situation depends on China‘s decision concerning increasing or decreasing export quotas, production rates and market regulation. Heavy REEs will play the key role in demand for the next decade. China‘s Ion Adsorption Clay deposits will be the only producers of Heavy REE until 2016. Heavy REE export from China will be strictly regulated through Chinese government in the near future. Institut für Mineralogie und Lagerstättenlehre Friedrichs, Meyer & Stoltz

Thank you for your attention! Institut für Mineralogie und Lagerstättenlehre Friedrichs, Meyer & Stoltz

References Chakhmouradian, A. R. & Wall, F. (2012): Rare Earth Elements: Minerals, Mines, Magnets (and More).Elements, Vol. 8, pp. 333-340 Hatch, P. G. (2012): Dynamics in the Global Market for Rare Earths.Elements, Vol. 8, pp.341-346. U.S. Department of Energy (2012): Critical Materials Strategy, December 2012. Kingsnorth, D.J. (2012): Rare earths supply security: Dream or possibility. 4th Freiberg Innovations Symposium, Freiberg, Germany, oral presentation. Kingsnorth, D.J. (2012): The global Rare Earths Industry: Dreams or possibility. 8th Uranium & RE Conference, Fremantle, Australia, oral presentation. Hatch, P.G. (2011): Critical Rare Earths. Technology Metals Research, August 2011. Institut für Mineralogie und Lagerstättenlehre Friedrichs, Meyer & Stoltz