Argus Rare Earths Rare earths market prices, news and analysis Issue 1 Thursday 2 October 2014

MarkEt HiGHLiGHtS Molycorp clears bottleneck at Mt pass US rare earth miner Molycorp has expanded its leach system at the Mountain Pass mine in California, which will alleviate a major production bottleneck at the facility and kick start greater production once it is fully operational. p3

Weak demand from magnet, phosphor sectors Prices for most rare earths remained under pressure during the past week as a result of plentiful domestic supply and weak demand from the NdFeB magnet and phosphor sectors, especially for praseodymium/neodymium, gadolinium and europium. p2

Lynas losses triple amid equity share issue Australian rare earth miner and refiner Lynas has announced A$83 mn ($72.4 mn) in equity raising, while reporting a trebling of full year loses at A$365.8 mn ($319.2 mn) in the year to June 30. p9

analysis: Southern africa gains momentum

priCES Market snapshot 02 Oct Element

units

Low

High

Cerium metal min 99% fob China oxide min 99% fob China metal min 99% ex-works China oxide min 99% ex-works China

±25 Sep

USD/kg USD/t CNY/t CNY/t

10.00 4,500 44,000 14,000

12.00 5,000 45,000 15,500

-

Lanthanum metal min 99% fob China oxide min 99% fob China metal min 99% ex-works China oxide min 99% ex-works China

USD/kg USD/t CNY/t CNY/t

9.50 4,500 40,000 15,000

10.50 5,200 42,000 16,500

-

Praseodymium-Neodymium metal min 99% fob China oxide min 99% fob China metal min 99% ex-works China oxide min 99% ex-works China

USD/kg USD/t CNY/t CNY/t

85.00 90.00 65,000 70,000 382,000 388,000 293,000 300,000

-1,500 -1,000

Samarium metal min 99% fob China oxide min 99% fob China metal min 99% ex-works China oxide min 99% ex-works China

USD/kg USD/kg CNY/t CNY/t

25.00 28.00 5.00 6.00 90,000 110,000 15,000 18,000

-

Price tables show latest price assessments compared to one week ago. Most prices are assessed twice-weekly. For a full record of all the current week’s prices please see separate tables entitled “Current week prices in full” which appear after the news and analysis section of the report.

Southern Africa’s significant rare earths development potential is set to make further progress with at least two companies due to make announcements on the economic viability of their prospects before the end of the year. p5

68,000

Canada targets 20pc of critical element supply

66,000

Canada’s rare earth industry wants to delivering 20pc of the world’s critical rare earths - neodymium, terbium, yttrium, europium and dysprosium by 2018. p6

64,000

86.50

62,000

86.00

Neodymium oxide and metal 99% min fob China Oxide, $/t, LH scale Metal, $/kg, RH scale

87.50 87.00

85.50

60,000 58,000 4 Apr 14

88.00

85.00 20 May 14

3 Jul 14

18 Aug 14

84.50 2 Oct 14

CONtENtS Metal-Pages is the leading provider of benchmark price assessments, news, analysis and events for the rare earths industry. Argus Media acquired Metal-Pages in May 2014.

Copyright © 2014 Argus Media Ltd

Market commentary Chinese export and Europe delivered prices China domestic prices Market news and analysis Price indexes Market data and project tracker

2 2 3 3-9 10 13-17

Argus Rare Earths

Issue 1 Thursday 2 October 2014

Market COMMENTARY and prices Weak demand from magnet, phosphor sectors Prices for most rare earths remained under pressure during the past week as a result of plentiful domestic supply and weak demand from the NdFeB magnet and phosphor sectors, especially for praseodymium/neodymium, gadolinium and europium. But some buying interests has emerged recently in the market for dysprosium oxide. Spot market activity fell ahead of the Chinese National Day holiday (1-7 October). The export market remained slow, with overseas consumers apparently in no hurry to replenish stocks. A number of traders have halted price quotations due to limited enquires and orders. This week, export prices were at $4.50-5.00/kg for 99-99.9% lanthanum oxide and $4.00-4.50/kg for cerium oxide, respectively. As a result of an overhang of stocks and inactive demand, prices for 99% praseodymium/neodymium oxide prices remained in a downward trend at CNY290,000-295,000/t, and lower prices below CNY290,000/t were also heard in the market. In line with declining Pr/Nd oxide prices, metal prices decreased to CNY380,000/t in the past week. But dysprosium oxide prices have gradually stabilised, supported by increased buying interest following a fall in the first half of September. Consumer buying for dysprosium oxide has been relatively active compared with other materials during the last ten days. A trader in Asia said flows of rare earths from China into Hong Kong are facing delays due to extra vigilance by customs officials who are checking cargoes more thoroughly following a smuggling scandal Europe A number of cerium oxide trades for 5-10t were heard at $4.10-4.30/kg. Another trader placed European market prices at $4.00-4.50/kg, but cited low demand. A 65/35 mischmetal trade was reported at $7.10-7.20/ kg with a number of mischmetal transactions reported in Europe over recent weeks. But the price trend remains downward due to high availability coupled with weak spot market demand. One trader reported a consumer seeking neodymium metal at around $80/kg. No transaction was reported. There were also reports of some enquiries for erbium oxide, with European prices heard at around $53-55/kg. Praseodymium oxide is now being quoted at below $100/ kg in Europe, at levels of around $95/kg with traders seeing a gradual easing in supply tightness.

Copyright © 2014 Argus Media Ltd

China export and delivered Europe prices 02 Oct Element

units

Low

High

±25 Sep

Cerium carbonate min 45% REO fob China

USD/kg

2.90

3.20

-

metal min 99% fob China

USD/kg

10.00

12.00

-

oxide min 99% fob China

USD/t

4,500

5,000

-

oxide 99% cif Europe

USD/kg

4.00

5.00

-

metal min 99% fob China

USD/kg

450.00

500.00

-

oxide min 99% fob China

USD/kg

320.00

360.00

-

Dysprosium

Europium metal min 99% fob China

USD/kg

950.00 1,050.00

-

oxide min 99.9% fob China

USD/kg

700.00

750.00

-

USD/kg

330.00

380.00

-

Ferro-dysprosium min 80% Dy fob China Gadolinium metal min 99% fob China

USD/kg

130.00

135.00

-

oxide min 99% fob China

USD/t

44,000

49,000

-

-

Lanthanum metal min 99% fob China

USD/kg

9.50

10.50

metal min 99% fob China

USD/kg

9.50

10.50

-

oxide min 99.999% fob China

USD/kg

8.50

9.20

-

Mischmetal 35% La 65% Ce fob China

USD/kg

9.20

10.00

-

low Zn and Mg fob China

USD/kg

28.00

30.00

-

metal min 99% fob China

USD/kg

84.00

86.00

-

oxide min 99% fob China

USD/t

58,000

61,000

-

metal 99% cif Europe

USD/kg

90.00

95.00

-

oxide 99% cif Europe

USD/kg

51.00

58.00

-

145.00

155.00

-

118,000 121,000

-

Neodymium

Praseodymium metal min 99% fob China

USD/kg

oxide min 99% fob China

USD/t

Praseodymium-Neodymium metal min 99% fob China

USD/kg

85.00

90.00

-

oxide min 99% fob China

USD/t

65,000

70,000

-

metal min 99% fob China

USD/kg

25.00

28.00

-

oxide min 99% fob China

USD/kg

5.00

6.00

-

metal min 99% fob China

USD/kg

800.00

850.00

-

oxide min 99% fob China

USD/kg

590.00

640.00

-

Samarium

Terbium

Yttrium metal min 99.9% fob China

USD/kg

55.00

65.00

-

oxide min 99.999% fob China

USD/t

12,300

14,300

-

oxide 99.999% cif Europe

USD/kg

13.00

15.00

-

Page 2 of 18

Argus Rare Earths

Issue 1 Thursday 2 October 2014

Market NEWS and analysis China domestic ex-works prices

Molycorp clears bottleneck at Mt Pass US rare earth miner Molycorp has expanded its leach system at the Mountain Pass mine in California, which will alleviate a major production bottleneck at the facility and kick start greater production once it is fully operational. “Expanding our leach system is a significant step in our efforts to increase rare earth production over the coming months at Mountain Pass and [we] to continue to reduce our operating costs," said Geoff Bedford, Molycorp president and CEO. "We remain committed to meeting our customers’ needs by building a global, vertically integrated company that produces rare earth materials in an environmentally superior way and at a cost that is competitive with any other producer in the world." The system improvements include the installation of additional leach tanks, a proven technology to increase the system's retention capacity. The company said that while operations of the new system are expected to be limited in the near term due to constraints in onsite production and market availability of hydrochloric acid (HCI), officials said that the system expansion addresses one of the major production bottlenecks at Mountain Pass and is expected to boost rare earth production and lower operating costs once it is fully operational and sufficient supplies of acid are available. Molycorp said that the onsite Chlor-Alkali facility at Mountain Pass, which uses process waste water to produce HCl and other chemical reagents used in rare earth production, is operational and output is expected to increase as it makes equipment repairs and address quality issues related to the brine feedstock that have been hampering the plant's operations.

02 Oct Element

units

Low

High

±25 Sep

Cerium carbonate min 45% REO

CNY/t

7,000

8,000

-

metal min 99%

CNY/t

44,000

45,000

-

oxide min 99%

CNY/t

14,000

15,500

-

metal min 99%

CNY/kg

2,000

2,200

-

oxide min 99%

CNY/kg

1,400

1,450

-

metal min 99%

CNY/kg

20,500

20,700

-

oxide min 99.9%

CNY/kg

2,400

2,600

-

CNY/kg

1,450

1,500

-

Dysprosium

Europium

Ferro-dysprosium min 80% Dy Gadolinium metal min 99%

CNY/t

460,000 470,000

-

oxide min 99%

CNY/t

103,000 110,000

-1,000

Lanthanum CNY/t

40,000

42,000

oxide min 99.999%

CNY/t

38,000

40,000

-

oxide min 99%

CNY/t

15,000

16,500

-

37,000

metal min 99%

-

Mischmetal 35% La 65% Ce

CNY/t

39,000

-

low Zn and Mg

CNY/t

130,000 140,000

-

metal min 99%

CNY/t

380,000 390,000

-

oxide min 99%

CNY/t

285,000 295,000

-

metal min 99%

CNY/t

660,000 680,000

-

Interview: Mintek drives advancements in REEs

oxide min 99%

CNY/t

513,000 525,000

-1,000

The world’s largest minerals research and testing facility outside of China, South Africa’s state-owned Mintek is playing a leading role in the rare earths sector through its one-stop-shop service that includes a pilot separation plant to treat rare earth materials from various parts of Africa and around the world. In an interview, Peter Craven, Mintek’s general manager of business development, described the vital role the Johannesburg-based organisation is playing in assisting rare earths producers to test their products and meet their downstream requirements. “More than 50pc of our rare earths processing work is coming from outside of South Africa, indicating that we have

Praseodymium-Neodymium metal min 99%

CNY/t

382,000 388,000

-1,500

oxide min 99%

CNY/t

293,000 300,000

-1,000

metal min 99%

CNY/t

90,000 110,000

-

oxide min 99%

CNY/t

15,000

18,000

-

metal min 99%

CNY/kg

3,800

4,000

-

oxide min 99%

CNY/kg

2,600

2,700

-

Copyright © 2014 Argus Media Ltd

Neodymium

Praseodymium

Samarium

Terbium

Yttrium metal min 99.9%

CNY/kg

oxide min 99.999%

CNY/t

Page 3 of 18

250

280

-

38,000

41,000

-

Argus Rare Earths

Issue 1 Thursday 2 October 2014

Market news and analysis become known around the world for the state-of-the-art testing and piloting facilities and services we offer,” said Craven, who used to be an executive at BHP Billiton. South Africa has been involved in the rare earths industry since the 1970s when much of the focus was on exporting mineral sands from Kwazulu-Natal on the country’s east coast to France’s Rhone-Poulenc, which is today known as Rhodia. Although Craven believes that “first prize” would be to have a fully-fledged rare earths refinery in South Africa, there is currently not enough production within Southern Africa to warrant such a facility, which could cost $500 million-$1 billion to establish. “To be globally competitive and towards the bottom of the cost curve, a refinery needs to produce around 20,000 tonnes of rare earth oxides a year – none of the deposits in Southern Africa can currently support this,” he said. In the longer term, he believes a toll-treating refinery may be viable, but it would need “a leap of faith and investment” from government, producers and the downstream market. “I’m sure there will be a new rare earths refinery somewhere in the world in the next ten years, but where – India, Brazil, South Africa”, said Craven.” Significantly, Mintek, which was established more than 80 years ago and handles about 800 commercial projects a year over a wide range of minerals, has invested more than ZAR100 million ($9.4 million) in establishing its rare earths expertise. “We started off with phospho-gypsum waste dumps and minerals sands and then moved more broadly into rare earths,” explained Craven. “Today we do most of the commercial test work in the world that is associated with the rare earths industry – this includes crushing, screening, cracking, separation and processing test batches.” Putting Mintek’s rare earths involvement into perspective, it is currently the biggest single contributor to Mintek’s research and testing revenues, eclipsing all other minerals. Its rare earths focus is very much on piloting a variety of aspects of the end-to-end processing of ore deposits which get treated in different ways, depending on their physical nature and ultimate applications. “We have bits and pieces of different processes in different places,” said Craven, adding that the new pilot separation plant is in the early stages of commissioning and will soon be officially opened. Pre-prepared material goes into the plant and is separated into 17 streams. While solvent extraction usually has

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to go through 60-100 stages for each rare earths element, Mintek’s technology enables far fewer stages to be needed. “We’re hoping to have 10-20 stages for each element, which we believe will give us a competitive advantage,” added Craven, who stressed that Mintek clients may have vastly different requirements. While one client may want their ore to be concentrated from 5pc Total Rare Earth Oxides (TREO) up to 20pc and then go through cracking, the separation plant and on to downstream fabricators, another may simply want uranium and thorium removed. Some clients may want their rare earth material to only go through certain stages of processing, while others may want a blend of rare earths to be assimilated. “Through the separation process, our pilot facility can produce a separated metal or a group of separated metals, depending on the client’s preference. We can also do a split between heavy, medium and light rare earths, removing elements such as lanthanum and cerium, which have very little value,” said Craven. Looking to the future, while Craven thinks China will continue to dominate the fortunes of the rare earths market for some time to come, he also believes that there should be healthy demand for several rare earths as high-end urban applications continue to grow, warranting a 4-5pc increase in annual supply and demand. Although he describes the global rare earths supply situation as experiencing “an overhang” – mainly due to China’s dominance, Lynas Corporation’s Mount Weld facility in Malaysia and Molycorp’s Mountain Pass operation in California – he is cautiously optimistic about the outlook for the industry, especially as downstream market players show an interest in the establishment of strategic, alternative sources of supply. .

Chinese Europium export and ex-works

50,000

ex-works, CNY/kg, LH scale fob, $/kg, RH scale

1,500 1,250

40,000

1,000

30,000

750 20,000

500

10,000

Page 4 of 18

0 4 Apr 14

250

20 May 14

3 Jul 14

18 Aug 14

0 2 Oct 14

Argus Rare Earths

Issue 1 Thursday 2 October 2014

Market news and analysis Analysis: Southern Africa’s projects gain speed Southern Africa’s significant rare earths development potential is set to make further progress with at least two companies due to make announcements on the economic viability of their prospects before the end of the year and South African state-owned minerals research agency, Mintek, continuing to grow its processing and advisory capabilities. While Southern Africa is much better known for its abundance of precious metals such as gold and platinum and base metals such as chrome and manganese, it also has deposits of lesser metals such as antimony and vanadium, as well as mineral sands and rare earths. Importantly, the South African government is very keen on mineral beneficiation as it believes this is more valuable as a job creator and income earner than merely exporting raw materials. Gaining mining rights can be a lengthy and tortuous process, but once they have been awarded, exploration and mining operations usually run pretty smoothly, notwithstanding labour disputes such as the five-month strike which crippled the platinum industry from January to June this year. In its Rare Earths Capability Statement, Mintek, which has been involved in the rare earths arena for more than four decades, says its core competencies now include mineralogy, analysis, beneficiation techniques, chlorination, cracking, leaching, impurity removal, separation and process modelling. It also markets itself as a rare earth “one stop shop” with the ability to provide metallurgical services, an integrated pilot plant facility, process modelling and flowsheet development. With rare earth elements increasingly being used in the global shift to cleaner energy sources, the interest in what South Africa and its neighbours have to offer continues to grow, despite the complex nature of the secondary refining process. Producing a rare earth concentrate is just the first part of the exercise as this still needs to be followed by separating rare earths into their various elements – this is where organisations like Mintek are playing an invaluable role in turning potential into reality. Particular challenges for companies looking to develop rare earth deposits in Africa are the dearth of local consultants, developing flow-sheets for deposits, and then refining their rare earths before they can be marketed downstream. Mintek said last year that it was considering establishing a central refinery to process the production of rare earth miners. When it comes to transport links, South Africa is well

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connected via road, rail and shipping facilities. Some it of its neighbours do have a problem with infrastructure, but this is improving. Radiation legislation in South Africa falls under the National Nuclear Regulation Act and the National Nuclear Regulator’s safety policies are roughly in line with international norms. Canadians leading the charge Currently, three Toronto-listed companies, each at different stages of progress with their projects, appear to be leading the charge in Southern Africa. Namibia Rare Earths, Frontier Rare Earths and Great Western Minerals are conducting feasibility studies on deposits located in South Africa’s Northern Cape province, Western Cape province and in north-west Namibia. Other companies that have had dealings with Mintek and are involved in building African rare earths portfolios include Montero Mining & Exploration (Wigu Hill), Avalon Rare Metals (Nechalacho), Phalaborwa Phosphogypsum and Mkango Resources (Songwe Hill). Namibia Rare Earths said on May 21 that it had commissioned a Preliminary Economic Assessment at its Lofdal heavy rare earths prospect in north-west Namibia, indicating that this should be completed by the end of September. The company has described Lofdal as “a unique opportunity for the development of a significant heavy rare earths supply outside of China.” Test work has indicated that the targeted mining concentrate grade of 20pc total rare earth oxides can be attained from low grade feed of 0.3pc of total rare earth oxides. Namibia Rare Earths has also appointed a financial adviser to explore the Lofdal project’s marketing and revenue options. Frontier Rare Earths, which is developing the Zandkopsdrift rare earth deposit in the Northern Cape, is Chinese dysprosium export and ex-works

2,500

ex-works, CNY/kg, LH scale fob, $/kg, RH scale

.

700 600

2,000

500

1,500

400

1,000

300 200

500 0 4 Apr 14

Page 5 of 18

100 20 May 14

3 Jul 14

18 Aug 14

0 2 Oct 14

Argus Rare Earths

Issue 1 Thursday 2 October 2014

Market news and analysis due to release the results of its pre-feasibility study in the fourth quarter. It has a joint venture agreement with Korea Resources which will have access to production to supply strategically important raw materials to Korean industry. According to Frontier, it is confident that Zandkopsdrift has the potential to be the leading African rare earths project and one of the lowest cost producers of high purity separated rare earths outside of China. The company aims to produce terbium, europium, dysprosium, neodymium and yttrium in separated, high purity form. Meanwhile, in South Africa’s Western Cape province, Great Western Minerals has plans to build a rare earths separation plant to process material from its 74pc-owned Steenkampskraal project. It has a joint venture with China’s Ganzhou Qandong Rare Earths group. In late June, the company filed the results of the Steenkampskraal feasibility study undertaken by Venmyn Deloitte. The study indicated a mineral reserve of around 799,000 tonnes and a life of mine plan of around 14 years. Major rare earth elements that could be produced by the project include neodymium, dysprosium and terbium. Earlier this year, Great Western Minerals entered into a non-binding agreement for rare earth element separation services and successfully produced rare earth carbonates from a mini pilot plant at Steenkampskraal. If these companies stick to their plans, and feasibility studies are promising, there is a strong possibility that these rare earths projects will advance to a more production oriented phase in 2015 and 2016. South Africa, and some neighbouring countries, are actively seeking to diversify their mineral activities away from traditional resources, and rare earths offer an opportunity for this diversification to take place.

Canada targets 20pc of global production Canada's rare earth industry has set itself the ambitious target of delivering 20pc of the world's critical rare earths neodymium, terbium, yttrium, europium and dysprosium ­­­by 2018. The goal has been established by the Canadian Rare Earth Elements Network (CREEN), an industry led group with 24 members comprised of rare earth element producers, academics, commercial and national laboratories, engineering experts, entrepreneurs, consumer product manufacturers and governments. The network is bringing together different elements of the industry along with government, and this has helped at-

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tract multinational companies such as General Electric (GE) to the venture. In a sector until now dominated by China, Canadian project developers backed by labs and engineering consultants are working to design pilot and hydrometallurgical separation processes aimed at bringing rare earth element projects into production. The creation of a North American rare earth supply chain is seen as essential if Canada and the US are to maintain competitiveness in strategic industries such as green energy, cutting edge technology, and defence. At the same time, those involved in CREEN said it is less about breaking a Chinese monopoly and more to do with creating alternative sources of supply for the speciality alloys, phosphors and magnet industries. The Canadian industry group said its rare earth deposits must be developed for the creation of a secure North American rare earth supply chain, with the potential to generate billions of dollars of economic activity through value-added manufacturing. With much of Canada's focus on mining forming partnerships with overseas companies such as those from Japan would be one way Canada could build its own value added product industry, the country's rare earth industry leaders suggest. Over the next two years CREEN members will focus on putting Canadian hydrometallurgy and chemical process engineering expertise into finding unique solutions to complex chemistries involved in rare earth elements production processing. So far around $200 mn has been invested to develop nine 'advanced' rare earth element projects in Canada, which are said to be among the top 28 most advanced projects across the world. In June, CREEN held its first technical workshop in Canada's capital Ottawa, where 21 projects were identified before being narrowed down to half a dozen in the areas of rare earths separation, reagent production Neodymium oxide and metal 99% delivered Europe $/kg Oxide Metal

120 110 100 90 80 70 60 50 3 Apr 14

Page 6 of 18

19 May 14

2 Jul 14

18 Aug 14

2 Oct 14

Argus Rare Earths

Issue 1 Thursday 2 October 2014

Market news and analysis and environmental management. Participants drew up a list of work that needed to be undertaken on the projects as well as initial budgets.

Russia to extract REEs from uranium ore Russian scientists have developed a technology to enable the selective extraction of rare earths from uranium ore using a sulphuric acid-based process. The scientists from the Ural Federal University said the breakthrough involves the development of a unique 'sorbent' – a material used to absorb liquids and gases – which can extract individual rare earths and uranium. The process involves pumping sulphuric acid underground, which then dissolves the ore. The sorbent is then used to extract the elements from the concentrate using a special processing technique. According to the scientists the rare earths can be separated out from the concentrate without hampering the extraction of uranium. Over the next three years the scientists will work on a pilot plant based on their technology. They have managed to attract just under $8 million from the Russian government with a further $9 million to come from CJSC Energy projects, which is a partner company to the university. The scientists are hoping that the technology will enhance Russia's security of supply for rare earths, many of which are critical to weapons programmes, but also enable the country to play a greater role in the international market for rare earths.

Quest signs MoU with Fednav for Strange Lake Canadian rare earth miner Quest Rare Minerals has signed a binding Memorandum of Understanding (MoU) with Fednav Ltd to develop shipping solutions for the company's Strange Lake Project. Montreal-based Fednav will provide exclusive marine transportation and engineering services to TSX-listed Quest on all matters related to delivering rare earths ore concentrates from Quest's Strange Lake mine development to its proposed processing plant in Becancour, Quebec, said the company. Fednav will supervise the development of detailed ship specifications required to transport concentrate and mine provisions, as well as assistance in berth design, ship-loading equipment and port operational procedures. Fednav will also liaise with regulatory authorities and the concerned Aboriginal communities on behalf of the project. "We are extremely pleased to announce the partnership

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with Fednav on our Strange Lake Project. Their expertise in Canadian and international shipping, particularly in the North Labrador Sea, will strengthen our development plans and assist our project team in building a truly world-class mining operation," said Peter Cashin, president and CEO of Quest. He added that "this partnership brings Quest one step closer towards project realisation by mitigating some of the infrastructure risk associated with the project and, ultimately, bringing Strange Lake a step closer to production and will assist Quest in reinforcing its other strategic relationships." Fednav is an international dry-bulk shipping company with a highly diversified and modern ice-strengthened fleet of ships. It has participated in every major bulk shipping project in the Canadian Arctic and has provided innovative and practical solutions that have helped to develop shipping in the Canadian Arctic for over 50 years. Fednav currently provides bulk shipping solutions for Vale's Voisey's Bay Nickel operations, Xstrata's Raglan Mine and Teck Cominco's Red Dog mine in Alaska.

Northern targets Dy production by 2H 2016 Australia's Northern Minerals is targeting the second half of 2016 for dysprosium production at its Browns Range site in Western Australia. The company said it could start construction in the second quarter of next year if the Applecross, Western Australia-based company manages to secure financing running to A$314 million ($273 million). Engineers hail the site bordering Northern Territory state as one of the world's largest dysprosium deposits. Among the top three heavy rare earth projects outside of China, the Browns Range xenotime mineralisation has the highest percentage of HREO and the highest ratio of dysprosium to contained total rare earth oxide (TREO), the company said. Samarium oxide and metal 99% min fob China

$/kg

Oxide Metal

40 30 20 10 0 4 Apr 14

Page 7 of 18

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Argus Rare Earths

Issue 1 Thursday 2 October 2014

Market news and analysis The Browns range processing plant is forecast to produce 279,000 kg of dysprosium per year within 3.2 million kg of high purity rare earth oxides earmarked to be produced over a twelve month period. Production costs are put at 123/kg net of by product revenue given the grade, value and criticality of dysprosium supply, the company said. A definitive feasibility study is due for completion for the site on which the company since July 2010 has spent more than A$70 million ($61 million) with A$20 million ($17 million) of that total going towards process development. Executives have so far put a ten-year nominal mine life on the mine life, a figure they said is only restricted by the search for finance and could well rise as the project advances. Northern Minerals intends to extract rare earth ore using both open pit and underground mining. A beneficiation plant will treat up to 585,000 tonnes a year of ore to produce around 17,045 tonnes of mineral concentrate at a grade of 20%. The mixed rare earth oxide product will be packaged on site and shipped to international markets.

Search sees lower Capex at Foxtrot Search Minerals has said that it is hoping that capital expenditure will come in at less than $100 mn at its Foxtrot Resource in the east of Canada's Labrador province. This follows a development earlier this year that saw engineers undertake a simpler metallurgical treatment of coarse-crushed Foxtrot ore, giving high overall extractions of rare earths of 73.1pc to 78.9pc for La-Er, meaning there is no longer any need for grinding, flotation, gravity or magnetic separation to treat the Foxtrot ore. The process was so successful that a patent application was lodged with the US Patent Office to protect the Vancouver-based company's ownership of the technology. The company's revised process saw a metallurgical sample of the Foxtrot ore subjected to a simple process of crushing and treatment with concentrated sulphuric acid. The acid treated ore was water leached to extract REEs into the solution. The leached solids were filtered and washed. The leachate containing REEs was purified by a series of steps to produce a purified REO. Key steps included purification by pH adjustment with magnesium carbonate, precipitation of REEs with sodium carbonate, selective re-extraction of the REEs with hydrochloric acid, re-precipitation of REEs with oxalic acid and, finally, calcination of the rare earth oxalate to produce a REO for refining. Foxtrot is in the Port Hope Simpson Rare Earth Element District in Labrador with an expected ten-year mine life and

Copyright © 2014 Argus Media Ltd

has indicated mineral resources of 5.3 million tonnes, at an average grade of 0.89pc total Rare Earth Elements (TREE). Open pit mining would be carried at the site for for the first 3.5 years before moving underground. Production is forecast to return 38 million kg of rare earth material. Indicated mineral resources are estimated to total 9.23 million tonnes at 0.88pc TREE (or 1.07pc Total Rare Earth Oxides, while inferred mineral resources are estimated to total 5.17 million tonnes at 0.77pc TREE (or 0.93pc TREO). Surface samples are highly representative of deeper material, company engineers said. Permitting is yet to get underway but executives do not see the process taking too long given the simplicity of the project. They have yet to put a timeline on the development but said this should be governed by their ability to secure funding.

Lofdal project receives positive PEA TSX-listed mining hopeful Namibia Rare Earths has released a positive Preliminary Economic Assessment (PEA) for its Lofdal project in the southern African country and said that it has the potential to produce 1,500 tonnes a year of separated rare earths. Lofdal is situated in north western Namibia and is known as a heavy rare earth focused project. "This Preliminary Economic Assessment provides shareholders and investors with the first indications of the economic potential of Lofdal. The PEA confirms the strengths of the project in terms of its favourable rare earth distribution and amenability to conventional mining and processing, and demonstrates its financial strengths in terms of the low capital costs and significant cash flows. The PEA provides a clear path forward for development of the project," said president Donald Burton. The PEA said that the project will generate an after tax cumulative cash flow of $257 million with a net present value of $147 million and an internal rate of return of 43%. It also points out that there is considerable potential to expand the current mineral resource and recommends that additional drilling be carried out to provide for an extended mine life in conjunction with a six month prefeasibility study programme. "The PEA utilised the initial 43-101 compliant mineral resources for the Area 4 deposit at a cut-off grade of 0.1% total rare earth oxides, which provides 2.88 million tonnes of indicated mineral resources yielding 9,230 tonnes of REO, of which 7,050 tonnes are estimated to be heavy rare earth oxides and 3.28 million tonnes of inferred mineral resources

Page 8 of 18

Argus Rare Earths

Issue 1 Thursday 2 October 2014

Market news and analysis yielding 8,970 tonnes of REO, of which 6,700 tonnes are estimated to be HREO," it said. Namibia Rare Earths said that the project is not of sufficient scale to support capitalisation for a separation plant and it is envisioned that the final product will be delivered to a third party facility and subject to an offshore treatment charge. The miner said that while there is no mineral reserves estimate yet for the project, mining by open pit at a rate of 840,000 tonnes a year will provide a seven-year mine life.

Pele faces 3-year wait at Eco Ridge Pele Mountain Resources has said it faces a three-year wait for permitting at its Eco Ridge mining project in northern Ontario before construction can begin. In a challenging environment for financing the company will have to find capital costs stretching to at least C$563 million ($505 million) according to 2012 estimates. Eco Ridge sits in the Elliot Lake Mining Camp, Ontario, with past production exceeding 300-million lbs of uranium oxide in the only mining region so far in Canada to have achieved commercial production of rare earth oxides. Uranium minerals are the major mineral sources for yttrium and heavy rare earths at Eco Ridge. A review of Pele’s 2012 Preliminary Economic Assessment put rare earth oxide production over the project's 14 year mine at 141.6 million lbs and uranium oxide production at 42.7 million lbs. The review found that 52pc of project revenue would come from rare earth oxides, nearly 80pc of REO revenue from critical REO namely neodymium, dysprosium, yttrium, terbium, and europium oxides in addition to scandium oxide. Life-of-mine production includes 20.7 million lbs of Nd2O3, 1.3 million lbs of dysprosium oxide, 6.0 million lbs of yttrium oxide, as well as 'significant quantities' of terbium, europium, and scandium oxides, which the company said provides a vital source of critical REO from outside China. At the same time life of mine average operating unit costs were put at $72.12/tonne against net revenues of $143/ tonne.

NdFeB electric motors to reduce shipping costs US-based maker of power generation components, The Switch, is promoting the benefits of using rare earths permanent magnet technology for the propulsion systems for multi-purpose ships claiming they are lower cost than alternative technologies. The promotion of new ranges of electric motors by the

Copyright © 2014 Argus Media Ltd

Switch, which use NdFeB magnets, is in sharp contrast to many other manufacturers, which regularly focus on the fact that their latest designs do not use rare earth magnets. Manufacturers of electric cars, for instance, have tended to shun them due to concerns over volatile prices and China's stranglehold over global rare earths supplies. Nonetheless, many industry experts still believe that NdFeB magnet-based technologies remain the most effective, despite many of the announcements regarding new REE-free designs. According to the Switch, owners of multi-purpose vessels face a number of cost pressures due to competitive markets and also because they often carry partial loads. Many ship owners have been trying to tweak standard propulsion technology systems, such as electric induction motors, to improve performance. The Switch, which is owned by Japan's Yaskawa group, and better known for renewable power generation, is touting the benefits of NdFeB (neodymium ferrous boron) permanent magnet motors in ships to save on fuel and maintenance costs. According to the firm permanent magnet synchronous motors are more modular, lighter, flexible and efficient. NdFeB magnets offers very high flux densities when compared with other types of magnets. This makes them ideal for variable speed motors and generators. The Switch believes NdFeB permanent magnet motors are 2-4% more efficient than induction equivalents for ships carrying full loads and 10% better when moving a partial load. This is due to factors such as reduced winding losses. The firm says the motors are suitable for ferries, tugboats and ice breakers.

Lynas losses triple amid equity share issue Australian rare earth miner and refiner Lynas has announced A$83 million ($72.4 million) in equity raising while reporting a trebling of full year loses at A$365.8 million ($319.2 million) in the year to June 30. The previous year the miner posted a loss of A$107.4 million ($93.7 million). For the full year, the company increased revenue to A$64.6 million ($56.4 million) from A$950,000 ($829,000) in fiscal 2013. Turning to capital raising, Lynas said that it hopes to raise A$71 million ($61.95 million) in a renounceable share offer as well as another A$12 million ($10.5 million) in a placement to institutional investors. The company will offer 150 million new shares to institutional investors and use the A$12 million ($10.5 million) to help with its senior debt repayment of $10 million in September.

Page 9 of 18

Argus Rare Earths

Issue 1 Thursday 2 October 2014

price Indexes Argus rare earths indexes (cumulative averages) element

units

month index Oct 14

month index Sep 14 final

Quarter index 4Q 14

Quarter index 3Q 14 final

Cerium carbonate min 45% REO fob China

USD/kg

3.05

3.05

3.05

3.09

metal min 99% fob China

USD/kg

11.00

11.00

11.00

11.72

oxide min 99% fob China

USD/t

4,750.00

4,750.00

4,750.00

4,842.59

oxide 99% cif Europe

USD/kg

4.50

4.50

4.50

4.50

Dysprosium metal min 99% fob China

USD/kg

475.00

475.00

475.00

478.70

oxide min 99% fob China

USD/kg

340.00

340.00

340.00

345.93

metal min 99% fob China

USD/kg

1,000.00

1,000.00

1,000.00

1,012.96

oxide min 99.9% fob China

USD/kg

725.00

725.00

725.00

731.30

USD/kg

355.00

355.00

355.00

359.44

Europium

Ferro-dysprosium min 80% Dy fob China Gadolinium metal min 99% fob China

USD/kg

oxide min 99% fob China

USD/t

132.50

132.50

132.50

132.50

46,500.00

46,500.00

46,500.00

46,500.00

Lanthanum metal min 99% fob China

USD/kg

10.00

10.00

10.00

10.09

metal min 99% fob China

USD/kg

10.00

10.00

10.00

10.09

oxide min 99.999% fob China

USD/kg

8.85

8.98

8.85

9.46

35% La 65% Ce fob China

USD/kg

9.60

9.60

9.60

9.60

low Zn and Mg fob China

USD/kg

29.00

29.00

29.00

29.00

Mischmetal

Neodymium metal min 99% fob China

USD/kg

oxide min 99% fob China

USD/t

metal 99% cif Europe

USD/kg

92.50

oxide 99% cif Europe

USD/kg

54.50

85.00

85.00

85.00

85.15

59,500.00

59,500.00

59,500.00

60,240.74

92.50

92.50

92.50

54.50

54.50

57.15

Praseodymium metal min 99% fob China

USD/kg

oxide min 99% fob China

USD/t

150.00

150.00

150.00

150.74

119,500.00

119,500.00

119,500.00

120,240.74

Praseodymium-Neodymium metal min 99% fob China

USD/kg

oxide min 99% fob China

USD/t

87.50

87.50

87.50

87.50

67,500.00

67,500.00

67,500.00

67,500.00

Samarium metal min 99% fob China

USD/kg

26.50

26.50

26.50

27.65

oxide min 99% fob China

USD/kg

5.50

5.50

5.50

6.30

metal min 99% fob China

USD/kg

825.00

825.00

825.00

831.67

oxide min 99% fob China

USD/kg

615.00

615.00

615.00

620.93

Terbium

Yttrium metal min 99.9% fob China

USD/kg

oxide min 99.999% fob China

USD/t

oxide 99.999% cif Europe

USD/kg

Copyright © 2014 Argus Media Ltd

60.00

60.00

60.00

60.00

13,300.00

13,300.00

13,300.00

13,518.52

14.00

14.00

14.00

13.20

Page 10 of 18

Argus Rare Earths

Issue 1 Thursday 2 October 2014

Current week prices in full China export and delivered Europe prices 02 Oct Element

units

Low

30 Sep High

±30 Sep

Low

High

±25 Sep

Cerium carbonate min 45% REO fob China

USD/kg

2.90

3.20

-

2.90

3.20

-

metal min 99% fob China

USD/kg

10.00

12.00

-

10.00

12.00

-

oxide min 99% fob China

USD/t

4,500

5,000

-

4,500

5,000

-

oxide 99% cif Europe

USD/kg

4.00

5.00

-

4.00

5.00

-

metal min 99% fob China

USD/kg

450.00

500.00

-

450.00

500.00

-

oxide min 99% fob China

USD/kg

320.00

360.00

-

320.00

360.00

-

Dysprosium

Europium metal min 99% fob China

USD/kg

950.00

1,050.00

-

950.00

1,050.00

-

oxide min 99.9% fob China

USD/kg

700.00

750.00

-

700.00

750.00

-

USD/kg

330.00

380.00

-

330.00

380.00

-

Ferro-dysprosium min 80% Dy fob China Gadolinium metal min 99% fob China

USD/kg

130.00

135.00

-

130.00

135.00

-

oxide min 99% fob China

USD/t

44,000

49,000

-

44,000

49,000

-

Lanthanum metal min 99% fob China

USD/kg

9.50

10.50

-

9.50

10.50

-

metal min 99% fob China

USD/kg

9.50

10.50

-

9.50

10.50

-

oxide min 99.999% fob China

USD/kg

8.50

9.20

-

8.50

9.20

-

Mischmetal 35% La 65% Ce fob China

USD/kg

9.20

10.00

-

9.20

10.00

-

low Zn and Mg fob China

USD/kg

28.00

30.00

-

28.00

30.00

-

Neodymium metal min 99% fob China

USD/kg

84.00

86.00

-

84.00

86.00

-

oxide min 99% fob China

USD/t

58,000

61,000

-

58,000

61,000

-

metal 99% cif Europe

USD/kg

90.00

95.00

-

90.00

95.00

-

oxide 99% cif Europe

USD/kg

51.00

58.00

-

51.00

58.00

-

Praseodymium metal min 99% fob China

USD/kg

145.00

155.00

-

145.00

155.00

-

oxide min 99% fob China

USD/t

118,000

121,000

-

118,000

121,000

-

Praseodymium-Neodymium metal min 99% fob China

USD/kg

85.00

90.00

-

85.00

90.00

-

oxide min 99% fob China

USD/t

65,000

70,000

-

65,000

70,000

-

metal min 99% fob China

USD/kg

25.00

28.00

-

25.00

28.00

-

oxide min 99% fob China

USD/kg

5.00

6.00

-

5.00

6.00

-

metal min 99% fob China

USD/kg

800.00

850.00

-

800.00

850.00

-

oxide min 99% fob China

USD/kg

590.00

640.00

-

590.00

640.00

-

Samarium

Terbium

Yttrium metal min 99.9% fob China

USD/kg

55.00

65.00

-

55.00

65.00

-

oxide min 99.999% fob China

USD/t

12,300

14,300

-

12,300

14,300

-

oxide 99.999% cif Europe

USD/kg

13.00

15.00

-

13.00

15.00

-

Copyright © 2014 Argus Media Ltd

Page 11 of 18

Argus Rare Earths

Issue 1 Thursday 2 October 2014

Current week prices in full China domestic ex-works prices 02 Oct Element

units

Low

30 Sep High

±30 Sep

Low

High

±25 Sep

Cerium carbonate min 45% REO

CNY/t

7,000

8,000

-

7,000

8,000

-

metal min 99%

CNY/t

44,000

45,000

-

44,000

45,000

-

oxide min 99%

CNY/t

14,000

15,500

-

14,000

15,500

-

metal min 99%

CNY/kg

2,000

2,200

-

2,000

2,200

-

oxide min 99%

CNY/kg

1,400

1,450

-

1,400

1,450

-

metal min 99%

CNY/kg

20,500

20,700

-

20,500

20,700

-

oxide min 99.9%

CNY/kg

2,400

2,600

-

2,400

2,600

-

CNY/kg

1,450

1,500

-

1,450

1,500

-

Dysprosium

Europium

Ferro-dysprosium min 80% Dy Gadolinium metal min 99%

CNY/t

460,000

470,000

-

460,000

470,000

-

oxide min 99%

CNY/t

103,000

110,000

-

103,000

110,000

-1,000

Lanthanum metal min 99%

CNY/t

40,000

42,000

-

40,000

42,000

-

oxide min 99.999%

CNY/t

38,000

40,000

-

38,000

40,000

-

oxide min 99%

CNY/t

15,000

16,500

-

15,000

16,500

-

Mischmetal 35% La 65% Ce

CNY/t

37,000

39,000

-

37,000

39,000

-

low Zn and Mg

CNY/t

130,000

140,000

-

130,000

140,000

-

metal min 99%

CNY/t

380,000

390,000

-

380,000

390,000

-

oxide min 99%

CNY/t

285,000

295,000

-

285,000

295,000

-

metal min 99%

CNY/t

660,000

680,000

-

660,000

680,000

-

oxide min 99%

CNY/t

513,000

525,000

-

513,000

525,000

-1,000

metal min 99%

CNY/t

382,000

388,000

-

382,000

388,000

-1,500

oxide min 99%

CNY/t

293,000

300,000

-

293,000

300,000

-1,000

metal min 99%

CNY/t

90,000

110,000

-

90,000

110,000

-

oxide min 99%

CNY/t

15,000

18,000

-

15,000

18,000

-

metal min 99%

CNY/kg

3,800

4,000

-

3,800

4,000

-

oxide min 99%

CNY/kg

2,600

2,700

-

2,600

2,700

-

Neodymium

Praseodymium

Praseodymium-Neodymium

Samarium

Terbium

Yttrium metal min 99.9%

CNY/kg

oxide min 99.999%

CNY/t

Copyright © 2014 Argus Media Ltd

250

280

-

250

280

-

38,000

41,000

-

38,000

41,000

-

Page 12 of 18

Argus Rare Earths

Issue 1 Thursday 2 October 2014

Market Data Project tracker Company

Mine

Mine country

Mine start Progress date

Resource mn t

TREO Notes mn t

Molycorp

Mt Pass

US

operating

Commercial production

32

2 Mainly lights

Lynas

Mt Weld

Australia operating

Commercial production

15

New chief ex1 ecutive, recent funding issues

Great Western

Steenkampskraal

South Africa

Feasibility study completed, declared mineral reserves, mini plant produces carbonate

Frontier Rare Earths

Zandkopsdrift

South Africa

Fully funded to complete PFS and DFS

Northern Miner- Browns als Range

Australia 2016

Pre-feasibility studies under way

Greenland Minerals and Energy

Kvanefjeld

Greenland

Pre-feasibilty, pilot plant

Ucore Rare Metals

Bokan

US

Pre Economic Assessment (PEA)

Alkane Resources

Dubbo Zirconia project

Australia

Post final feasibility studies, EIS on view, pilot plant working

73

1

Pele Mountain Resources

Eco Ridge

Canada

PEA, NI 43-101

59

0

Hastings Rare Metals

Hastings

Australia 2016

JORC resources established

36

0 HREE focus

Namibia Rare Earths

Lofdal

Namibia

Initiates preliminary economic assessment, retains financial adviser

2

0.010 HREE focus

Stans Energy

Kutessay II

Kyrgyzstan

Exploration, legal issues with Kyrgyz govt

Tantalus Rare Earths

Tantalus

Madagascar

Avalon Rare Metals

Nechalacho Basal

Peak Resources

1

0

42

1

6

0 HREE focus

619

7 HREE focus

5

0.030 HREE focus

Legal issues with Kyrgyz govt

18

0

Exploration stage

435

0

Canada

Entered into a 10-year binding third-party processing and strategic partnership agreement with Solvay. Federal government approval in November 2013.

126

2

Ngualla

Tanzania 2017

PFS and economic assessment, pilot plant

42

2

Arafura Resources

Nolans

Australia

Completed review of flowsheet and the Opex and Capex estimate

47

1

Tasman Metals

Norra Karr, Olserum

Sweden

Updated PEA1 (preliminary economic analysis)

58

0 HREE focus

Texas Rare Round Top Earth Resources

US

NI 43-101, preliminary economic assessment

Hudson Resources

Sarfartoq

Greenland

Quest Rare Minerals

Strange Lake Enriched

906

1

Exploration, drilling programme

8

0

Canada

Revised PEA, development plan

20

0

Montero Mining Wigu Hill and Exploration

Tanzania

Exploration stage

Mkango Resources

Songwe

Malawi

Pre-feasibility study under way, NI 43-101

32

1

Canada Rare Earths

Two Tom

Canada

REO 43-101 compliant

17

0

Rare Element Resources

Bear Lodge

US

NI 43-10, pre-feasibility stage

52

1.410

Copyright © 2014 Argus Media Ltd

2016

Page 13 of 18

0

0 LREE focus

Argus Rare Earths

Issue 1 Thursday 2 October 2014

Market data China rare earth exports Goods/Countries Praseodymium metal Japan Austria Neodymium metal Japan South Korea UK Germany Netherlands Lanthanum metal Japan UK Austria US Cerium oxide India Japan South Korea Thailand Turkey Vietnam Taiwan South Korea UK France Italy Netherlands Spain Austria Lithuania Georgia Russia Canada US Cerium carbonate India Japan South Korea Taiwan Germany France Italy Netherlands Finland US Lanthanum oxide Hong Kong India Indonesia Japan Germany Vietnam Taiwan UK Germany France Italy Netherlands Austria

Copyright © 2014 Argus Media Ltd

Aug volume kg

Aug revenue $

Jan-Aug volume kg

Jan-Aug revenue $

3,000 3,000 158,700 158,700 154,838 92,560 4,042 350 1 12,000 28,300 35 50 17,500 338,450 227,400 50 3,000 108,000 1,178,427 15,000 146,400 23,000 20,001 60,000 145,000 -

476,527 476,527 1,584,469 1,584,469 1,392,793 417,484 108,748 6,300 15 60,000 711,250 289 806 87,901 1,151,644 733,077 515 9,300 408,752 6,322,623 82,500 822,273 202,385 112,921 330,000 791,750 -

31,291 31,290 1 31,923 11,923 500 7,000 9,000 3,500 1,069,895 1,045,695 2,000 1,000 21,200 862,436 1,000 354,211 15,023 350 500 60,000 1,900 13,500 7,444 33,921 54,000 139,000 39,000 2,500 35 200 60,200 50 79,602 3,074,273 2 2,358,951 150 1,050 11,000 216,000 32,000 5,000 4,000 446,120 7,704,950 30,000 2,800 83,850 1,003,678 183,002 300,000 74,511 2,451 97,301 1 630,000 422,005 16

5,075,751 5,075,339 412 2,881,368 1,107,857 44,500 611,162 792,358 325,491 11,117,089 10,836,841 23,857 13,510 242,881 7,748,508 5,500 1,713,041 376,298 6,300 4,810 330,000 26,445 390,500 206,015 241,840 286,240 3,100,950 229,850 48,153 289 2,520 325,449 806 453,502 13,467,769 57 10,133,607 2,335 5,485 44,300 1,080,000 144,000 30,000 21,311 2,006,674 48,071,544 165,000 27,480 466,611 9,463,333 1,085,872 1,343,708 706,064 19,095 557,274 26 4,162,900 2,609,381 146

Page 14 of 18

Argus Rare Earths

Issue 1 Thursday 2 October 2014

Market data China rare earth exports Goods/Countries Lithuania Russia Brazil US Australia Neodymium oxide Hong Kong Japan South Korea Taiwan South Africa UK Germany France Netherlands Austria Lithuania Russia Mexico US Praseodymium oxide Japan South Korea Taiwan Fance Netherlands Lithuania Russia Canada US Terbium metal Japan Austria Canada Yttrium oxide India Japan South Korea Thailand Taiwan Germany France Italy Netherlands Lithuania Russia Canada US Europium oxide Hong Kong Japan South Korea Germany France Netherlands Portugal Austria Lithuania US

Copyright © 2014 Argus Media Ltd

Aug volume kg

Aug revenue $

Jan-Aug volume kg

Jan-Aug revenue $

25 769,001 45,978 150 25,591 1,000 750 1 8,000 5,025 1 2,400 3,060 10,705 10,000 600 5 100 21 1 20 68,806 38,651 2,210 3,040 500 10,000 80 25 14,300 232 1 200 1 30

222 3,980,572 2,944,276 10,500 1,605,692 64,000 49,043 60 544,000 303,666 35 180,020 187,260 1,281,655 1,191,733 77,898 524 11,500 17,867 977 16,890 1,110,907 577,694 30,919 139,312 8,000 143,400 1,560 325 209,697 191,115 809 166,000 720 23,586

25 51,000 40,000 4,784,209 101 247,241 250 163,942 9,400 7,350 8,500 1 300 3,000 2,000 8,001 20,025 151 10,240 14,081 88,207 54,275 10 1,802 24,000 125 5 150 1,000 6,840 851 826 5 20 652,799 2,000 378,721 14,278 2,000 12,940 1,000 30,400 117,000 12,160 25 2,500 7,000 72,775 1,118 2 58 21 600 2 151 50 50 3 181

222 292,500 220,000 26,949,427 2,505 16,976,622 17,500 11,066,926 742,091 516,274 598,998 60 40,327 208,500 142,580 544,035 1,304,716 10,177 774,670 1,009,768 10,800,088 6,661,237 1,400 237,163 2,923,450 15,294 524 19,187 110,000 831,809 782,803 761,113 4,800 16,890 12,073,464 26,108 6,492,917 600,467 34,000 536,018 16,000 526,208 2,024,366 207,378 325 50,975 129,000 1,429,702 961,672 2,400 48,815 19,325 494,980 3,000 149,676 38,500 49,800 3,120 152,056

Page 15 of 18

Argus Rare Earths

Issue 1 Thursday 2 October 2014

Market data China rare earth exports Goods/Countries

Aug volume kg

Aug revenue $

Jan-Aug volume kg

Jan-Aug revenue $

Dysprosium oxide Hong Kong Japan South Korea Taiwan Netherlands Portugal Austria Lithuania US Terbium oxide Hong Kong Japan South Korea Thailand France Lithuania US Erbium oxide Burma Hong Kong India Indonesia Iran Irsael Japan Malaysia South Korea Thailand UAE Vietnam Taiwan UK Germany France Netherlands Austria Finland Hungary Norway Poland Sweden Latvia Lithuania Russia US

1,185 600 540 40 5 605 602 2 1 181,749 730 40 200 87,400 720 2,667 4,250 100 26,550 9,725 3 3,529 21,700 603 1,550 580 180 100 47 21,075

487,700 221,920 239,042 25,038 1,700 383,313 381,083 1,600 630 7,143,320 35,011 2,646 13,031 1,456,635 8,540 215,037 66,421 4,200 395,900 173,567 44 277,375 418,178 30,370 104,610 38,369 11,556 229,160 1,302 3,661,368

7,191 250 4,775 1,710 180 25 125 50 5 71 5,816 250 4,156 5 400 4 1 1,000 1,578,657 14,600 5,205 6,541 160 200 5 860,577 1,800 22,465 75,260 200 219,070 20,307 16,003 38,420 13,362 78,800 4,157 1,550 10,750 4,000 3,340 920 300 47 2,620 177,998

3,216,248 115,125 1,964,215 890,670 135,952 15,302 43,575 21,500 1,700 28,209 4,035,946 197,625 3,098,091 3,933 144,400 3,200 630 588,067 63,005,504 145,726 6,399,820 365,308 10,814 13,031 281 19,470,952 30,040 6,023,096 2,443,272 11,665 3,040,888 1,350,519 98,599 5,362,573 1,089,085 3,796,110 1,242,881 85,250 866,472 213,386 222,005 66,952 687,645 1,302 137,727 9,830,105

— China General Administration of Customs

Copyright © 2014 Argus Media Ltd

Page 16 of 18

Argus Rare Earths

Issue 1 Thursday 2 October 2014

Market data Chinese export tariffs Element

Customs Code

Export tariff (2014)

Cerium

28053015

25.00%

Cerium oxide

28461010

15.00%

Cerium hydroxide

28461020

15.00%

Cerium carbonate

28461030

15.00%

Otherscerium compounds

28461090

15.00%

Dysprosium oxide

28469015

25.00%

Dysprosium

28053012

25.00%

Dysprosium chloride

28469022

25.00%

Dysprosium carbonate

28469043

25.00%

Dysprosium tetrafluoride

28469032

15.00%

Other dysprosium compounds

28469094

25.00%

Europium oxide

28469014

25.00%

Lanthanum oxide

28469012

15.00%

Lanthanum chloride

28469023

25.00%

Lanthanum carbonate

28469041

15.00%

Lanthanum tetrafluoride

28469033

15.00%

Other lanthanum compounds

28469091

25.00%

Neodymium oxide

28469013

15.00%

Neodymium

28053011

25.00%

Neodymium chloride

28469024

15.00%

Neodymium tetrafluoride

28469034

15.00%

Neodymium carbonate

28469044

15.00%

Other neodymium compounds

28469092

25.00%

Terbium oxide

28469016

25.00%

Terbium

28053013

25.00%

Terbium chloride

28469021

25.00%

Terbium carbonate

28469042

25.00%

Terbium tetrafluoride

28469031

15.00%

Other neodymium compounds

28469093

25.00%

Yttrium oxide

28469011

25.00%

Other rare earth oxides (except red powder for lamps)

28469019

15.00%

Other unmixed or unfusional rare earth metals, scandium and yttrium

28053019

25.00%

Praseodymium

28053016

25.00%

Praseodymium oxide

28469017

25.00%

Praseodymium chloride

28469025

15.00%

Praseodymium tetrafluoride

28469035

15.00%

Praseodymium carbonate

28469045

15.00%

Other praseodymium compounds

28469095

25.00%

Mixed or fusional rare earth metals, Scandium and yttrium, battery grade

28053021

25.00%

Mixed rare earth chloride

28469028

15.00%

Other mixed or fusional rare earth metals, scandium and yttrium

28053029

25.00% 15.00%

Unmixed rare earth chloride

28469029

Mixed rare earth carbonate

28469048

15.00%

Unmixed rare earth carbonate

28469049

15.00%

Rare earth metal ores

25309020

15.00%

Other rare metal ores and concentrates

26169000

10.00%

Yttrium

28053017

25.00%

Yttrium chloride

28469026

15.00%

Yttrium tetrafluoride

28469036

15.00%

Yttrium carbonate

28469046

15.00%

Other yttrium compounds

28469096

25.00%

Other rare earth tetrafluoride

28469039

15.00%

Other rare earth metals, Scandium and yttrium compound

28469099

25.00%

Copyright © 2014 Argus Media Ltd

Page 17 of 18

Argus Rare Earths

Issue 1 Thursday 2 October 2014

Neodymium oxide and metal 99% delivered Europe

$/kg

Oxide Metal

120

14.00

110

La - LH axis Eu - RH axis

Ce - LH axis 1,300 1,250

13.00

100

$/kg

Application focus - alloys

1,200

90

12.00

1,150

80

11.00

1,100

70 60 50 3 Apr 14

1,050

10.00

19 May 14

2 Jul 14

18 Aug 14

2 Oct 14

1,000

9.00 950 4 Apr 14 20 May 14 3 Jul 14 18 Aug 14 2 Oct 14

Argus Rare Earths is published by Argus Media Ltd.

Registered office Argus House, 175 St John St, London, EC1V 4LW Tel: +44 20 7780 4200 Fax: +44 870 868 4338 email: [email protected] ISSN: 2056-5550 Copyright notice Copyright © 2014 Argus Media Ltd. All rights reserved. All intellectual property rights in this publication and the information published herein are the exclusive property of Argus and/or its licensors and may only be used under licence from Argus. Without limiting the foregoing, by reading this publication you agree that you will not copy or reproduce any part of its contents (including, but not limited to, single prices or any other individual items of data) in any form or for any purpose whatsoever without the prior written consent of Argus.

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Metals illuminating the markets

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