LCM Rare Earths News Review

L o n d o n C o m m o d i t y M a r k e t s

C i t i b a n k T o w e r , 2 5 C a n a d a

S q u a r e , C a n a r y W h a r f ,

L o n d o n E 1 4 5 L Q

T e l : 0 0 4 4 ( 0 ) 2 0 3 5 1 4 6 0 0

F a x : 0 0 4 4 2 0 3 5 1 4 6 0 0 1

2 / 2 2 / 2 0 1 3

February 2013

The LCM Rare Earths News Review is a monthly

report compiled for London Commodity Markets to

provide a snapshot of the state of the global rare

earths industry.

Page | 1

Ucore Rare Metals set for Rare-Earth Alaska mine completion by 2016

Junior explorer Ucore Rare Metals Inc is

engaged in searching for rare earth

elements deposits in North America.

They have announced previously that

they aim to commence production at its

Bokan mine in Alaska by 2016, according

to local media reports.

According to a report in Metal-Pages,

Ucore which is focused primarily on its

Bokan-Dotson Ridge rare earth element

(REE) property.

If successful in obtaining the necessary

permits, construction of the mine is planned to in 2014, then becoming fully operational in

2016.

Last year in an interview with Rare Earth Investing News Ucore’s CEO Jim McKenzie said of the

Bokan Mountain mine as being, the largest NI 43-101 compliant heavy REE resource on United

States soil; as a result, it has enormous strategic implications for the US, especially given that

heavy REEs are the backbone of some of the technologies that are most important to the

country’s economic future (for instance,

transportation, clean energy, defence systems and

medical science).

He added that the project could help challenge

China’s domination of the market.

The Bokan property is particularly enriched with

heavy rare earth elements, including the critical

elements dysprosium, terbium and yttrium.

Approximately 40% (by weight) of the rare earth

elements contained on the Dotson Ridge property

are heavy rare earth elements, as disclosed in the

Company’s NI43-101 resource estimate technical

report, filed on April 21st, 2011.

The resource was completed by R. J. Robinson, a

consultant from Aurora Geosciences.

Page | 2

Japanese pilot project to begin extraction of rare earths in Jamaica

Japanese rare earth elements company Nippon Light

Metals (NLM) has started extracting rare earth

elements from its pilot plant in the Jamaica Bauxite

Institute (JBI) in Hope Gardens, St. Andrew.

The US $3 million pilot project will for the next three

months begin extracting rare earth elements from

the red mud which is rich in rare earth elements

deposits. Jamaican officials are confident exports of

rare earth elements have the potential to earn the

country more in export revenues than its current

aluminium exports.

Rare earth elements or lanthanides as they are also known as are critical ingredients in today’s

high tech industries that manufacture products such as smart phones, powerful magnets used

in electric motors to lasers and military hardware.

Many industries such as the electronics sectors, are highly dependent on supply and

availability of rare earth elements as they are key components in the manufacture of;

computers, Liquid Crystal Displays (LCDs), hybrid automobiles, wind power turbines, energy

efficient light bulbs, sensors, GPS technologies, CD and DVD drives, digital cameras, most optic

lenses, communication devices and satellites, among others.

Could Africa become the next rare earth elements frontier?

Many of the exploration companies that set out to explore Africa’s rare earth elements

potential are now starting to report some positive progress with their rare earth elements

(REE) projects on the continent.

South Africa in particular has seen a of activity during the last quarter, the country and the

continent as a whole is seen as key to the geopolitical tussle being fought to end China’s

dominance in the rare earth elements market.

A report last year concluded that Africa has enormous potential in that it contains “more than

half the world’s known deposits of carbonatites, a rock formation seen as perfect hunting

grounds for rare earth elements, as well as vast deposits of monazite sands which also contain

rare earth elements (REEs).

Page | 3

The Chinese effect on the REE Market

Rare earth elements (REEs) or rare earth metals are

17 chemical elements in the periodic table. While

many of these elements are actually found

abundantly in the earth’s crust, their geochemical

properties and dispersion make them difficult to

extract in the pure forms necessary for use in many

critical industries.

These rare earth metals are essential for industries

such as electronics, aerospace and clean energy.

Yttrium is used in energy efficient light bulbs and cerium is used in oil refineries as a fluid

catalytic cracking catalyst. The growing end-markets for REEs has made security of supply a top

concern for many industrial corporations and governments around the world.

Since the 1990′s China has become a leading supplier of rare earth elements, in part because

of their willingness to intensively mine the elements at the expense of the environment. Many

countries opted to close down their mining and extraction operations and simply import rare

earth metals from China, as prices were relatively cheap.

However the world received a wake-up call when China began to impose export restrictions on

rare earth metals and deeming them now as a strategic resource. Some analysts believe this

was a policy to encourage high tech industries to move their manufacturing operations to

China, where supplies and prices are more stable.

China maintains that the decision was both strategic and part of a wider effort to minimise the

environmental impact.

Rare earth metals prices could be set for a boost – report

A report by a leading investment website recently hinted at the possibility of imminent price

rises for various raw materials, including rare earth metals.

According to the report, the EU commission has announced that more funds should be

dedicated to rare earth elements research, in particular focusing on recycling and reducing

waste of rare earth elements.

The announcement was based on the fact that rare earth elements remain difficult to source,

with the EU still dependent almost exclusively on China for imports of rare earth elements.

Page | 4

Unfortunately, the report points out, the technology for recycling rare earth elements is still

largely hypothetical and it will have little impact on the actual mining of rare earth elements

for some time to come.

Japan has explored the recycling route with even greater urgency and yet its technology

companies still rely on imported Chinese rare earth elements.

The EU commissioner has announced steps to improve the supply of rare earth elements.

The proposed steps, at least initially, have less to do with finding efficient recycling techniques

than they do with simplifying trade legislation to speed up the import process.

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