79c to beat, page-6

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General Industry Developments: The world demand for REE continues to accelerate. Based on discussions and presentations at the International Rare Earth Conference held in Hong Kong in November 2007, the global demand for REE is projected to exceed 190,000 tonnes by 2012, for a projected global supply deficit of 20,000 tonnes. The projections do not consider the likelihood that Japan and the US will institute stockpiling to meet their internal demands. As well, these projections do not factor in development of new products or technologies such as RE magnetic refrigeration; the consensus is also that the demand for REE in Hybrid Vehicles is underestimated.

In October 2007, the U.S. Government issued a report on Minerals, Critical Minerals, and the U.S. Economy which designated Platinum Group Metals (PGM) and REE as the two top "critical metals" groups required for certain industries to remain economically viable. As well, these elements and metals are deemed to be critical by the US Department of Defense and to the defense industry overall. This report and other related industry reports are available from The National Academies Press (www.nap.edu).

In late December 2007, China, the primary global supplier of REE, announced an increase in export duties and tariffs on REE products, now at 15% to 25% on all REE products being exported from China. In addition to tariffs, China has also imposed restrictive export quotas