I’m sorry to report that you are right about the shortcomings of the FT report. The reporter contacted me, and I told him when I could be available to speak, but I never heard back from him. His story’s perspective was limited. He is unfortuneately for us typical of analytical or investigative journalists who failing to have or to want to have a perspective of their own simply report that of whomever they have interviewed no matter how limited or wrong the interviewee’s perspective may be.

In order to keep my perspective as open as possible Itry not to be beholden to any one company’s point of view nor am I selling any particular metal. Perspecive is the key to objectivity

There have been discussions about the fact that refining and purifying facilities are indeed the crux of the issue. One of the meetings starting tomorrow, the 2nd Strategic Materials Conference, will likely be addressing this issue as well as the entire supply chain. Dr Hatch has indicated that reports from various sources indicate the newest plans and techniques will be more far more efficient and economic than anything the Chinese are doing. Whether they can be constructed more rapidly than so far predicted, remains unknown. Regardless, it will take time and a considerable amount of money to develop these facilities, and inducing money from either institutional investment or federal sources will almost certainly be necessary as Jack has often pointed out. But they must be developed or, like you said, they’ll all fall under the same Chinese umbrella, and that situation is simply not tenable from either a security or economic standpoint.
It appears that all the other countries directly impacted by this current situation are taking steps to secure their own sources and develop their own process facilities, but for some time to come, China will continue to be the primary source for all processing.
At least one company , Great Western Minerals, has indicated that they might construct a smaller pilot facility to work out the metallurgy on their various properties, in an effort to establish a supply chain for their two current existing purifying and production facilities. Molycorp has a source and a refinery, but not yet any other downstream facilities, though they are currently working on partnerships. Avalon has indicated it has developed some new techniques, so it may also be considering entering the processing field.

As I understand it, rare earths sent to China for processing, will come under the same umbrella as if they were products mined in China.

If so, there is no short cut there.

I’ve been reading your articles on Seeking Alpha, as well as your comments on John Petersen’s articles, for some time now and greatly appreciate you breaking down for us less scientifically endowed the often arcane subject matter of the earth’s natural resources and how our handling of them affects the world markets. Thank you.

Along with the energy storage sector, one of my other chief investment interests is in the lighting industry. I’ve been able to apply a lot of what I’ve learned from John’s articles to my approach toward investing in the lighting industry because I find there to be many parallels. They are both industries that the modern world relies heavily upon; they are both industries in flux due to the world’s growing concerns about limited resources (your area of expertise); and they are both areas that offer investors great investment opportunities due in large part to the introduction of new technologies (along with, again, the greater interest in diminishing commodities).

I was hoping you might could comment on how the earth’s metals and other elements might come into play in the lighting industry now that incandescents are being banned in most of the industrialized world. I haven’t been able to locate such a discussion anywhere on the internet, though I think it would be invaluable to investors.

The primary players are LEDs; florescent lights (CFLs); the fading demand for incandescent bulbs; to a lesser extent, halogens; and a new player that threatens to shake up the race, ESLs (electron stimulated luminescence) developed by a company called Vu1. Like batteries for cars, the biggest expense for a light bulb is the power module which defines the bulbs’ technologies. Do you know anything about the materials that go into these different lighting technologies (specifically, the bulbs) and how access to these resources may play a role in the long term viability of their use? Any light you can shed on this would be greatly appreciated.

Tek

Educating people to properly evaluate the rare earth scenario, as you continually try to do, has so far to go. In the UK the Financial Times, our most prestigious and influential broadsheet, has just devoted a full page to the subject of obscure metals and rare earths under its Analysis format, seemingly written by a journalist rather than by someone with proven prior knowledge of the subject . The result is a reasonable statement of the background to the current debate but a total misreading of what has to be done and why. The writer has failed to comprehend that mines such as Mountain Pass can’t just be re-opened so as to take up where they previously stopped, and failed to realise that there is a complex refining process, also dominated by China, before mined material is useable. Worse still, he concludes that because the US government once built up a tin stockpile, which later proved to be unnecessary and had to be unwound, there is a danger that governments may make the same mistake again in relation to minerals/rare earths needed in far smaller quantities. To miss such an opportunity to put the subject in its proper perspective is seriously concerning and probably negative in its overall impact. If only the writer (Javier Blas) had talked to you first!

The biggest risks to the green road are resource constraints and the foolish allocation of limited resources to feel-good solutions that are actually quite wasteful. My favorite example is using advanced batteries to replace fuel tanks, thereby wasting scarce resources in order to conserve more plentiful ones. But there are other examples that are almost as egregious.

Have a great time on the trip.

As you so rightly say “The main obstacle to increasing the supply of rare earths outside of China will be today’s almost complete lack of rare earth refining, alloying, and fabricating capacity outside of China. This is a supply and value chain issue, and investors must be made to understand it before it can be addressed.”

Do you have any comments on Lynas’ (Mt Weld) decision to send raw material to Malaysia for processing.

Also, I am concerned that REE are undervalued in a strategic sense and that this generation may be selling its future without clear understanding of what are the implications.

Regards,

Geoff Alford