technical report on the nechalacho deposit, thor lake project ...

Table 18-18 Rare Earth supply – 2008
Avalon Rare Metals Inc. – Thor Lake Project
Source
Supply (tonnes)
China
Baotou 66,000
Sichuan 10,000 - 15,000
Ionic Clay Regions 36,000
Others
Recycling ~5,000
Russia 2,500 - 3,000
India 100
Mountain Pass 2,000
Total 121,600 - 127,100
Source: Roskill Information Services, 2010
It is most probable that effective production capacity in 2008 was approximately 125,000 tonnes
contained rare earth oxide (REO).
The Chinese government has instituted new regulations affecting licensing of rare earth
production and is strongly encouraging and supporting the consolidation of the industry by major
state-owned companies. Production licence quotas for concentrate have been reduced from
129,178 tonnes in 2008 to 119,500 tonnes in 2009. This quota level will remain in force until at
least July 2010 and likely longer, given recent (June 2010) announcements from the Chinese
authorities. In early July 2010, the Chinese authorities also announced a significant reduction in
the rare earth concentrate and metal export quotas available for the second half of 2010. The
reduction in export quotas is anticipated to extend into 2011 and beyond as the Chinese
authorities seek to promote domestic value-added rare earth production, at the expense of
exports of concentrates and unprocessed metal and oxides. These supply limitations are
anticipated to maintain upward pressure on rare earth prices for non-Chinese consumers.
The Chinese government is also actively engaged in supporting the consolidation of the rare
earth industry, especially with respect to crude ore supply from illegal mining. Inner Mongolia
Baotou Steel Rare Earth Hi-tech Company has taken effective control of mining and concentrate
production of rare earths in Inner Mongolia, as has Jiangxi Copper at Mianning, Sichuan
(although some illegal mining activity continues in Sichuan). China Minmetals Corporation has
been consolidating control of rare earth production from the ionic clay deposits in Jiangxi
Province, and the provincial authorities in Guangdong are encouraging consolidation of
production. Chinalco has also become involved in the consolidation of the rare earth industry in
Technical Report 43-101 – March 13, 2011 Page 18-76
Prepared by Avalon Rare Metals Inc.