Background 1. China holds 95% of the world's rare earth metals supply, and now controls 97% of the market. 2. In July, 2010, China reduced its rare earth export quota by 72%, sending prices soaring. Not only that, but it also has export taxes ranging from 15% to 25% on the metals. 3. The global demand for rare-earth permanent magnets will continue to grow at today’s rate of 10% pa. Therefore four years from now, in 2015, the demand will have grown by nearly 50%. 4. Molycorp would like to share 10-20% of that investment (and risk) with a partner over the course of 5-20 years.

Strength 1. We can produce rare earths for $1.25 a pound. At the same time, China's cost is $2.53 a pound. 2. Manufacturers in Japan and elsewhere, hesitant to trust their future raw materials supply to China. 3. There is the second largest mine in California, America.

Weakness 1. Today rare-earth-containing products supply chain, except for the first step, the mining, exists only in Japan. So we may need the cooperation with the Japanese Company. 2. If we cannot make a deal with Sumitomo, we will suffer a loss and have to find another partner.

Goals 1. Try to build the long-term relationship of the rare-earth business with Sumitomo. 2. Try to raise 10-20% of the investment. 3. We need the technical help of purifying water with efficient. 4. We will offer Sumitomo a discount of the products, such as lower than the present market price, but the price will be confirmed depends on the amount of investment they can provide. 5. We will not allow Sumitomo to resell the products they buy from us with an unreasonable price.