http://www.mineweb.com/mineweb/view/mineweb/en/page96985?oid=114035&sn=2010+Detail&pid=102055

...GEOFF CANDY: In terms of the companies themselves, what should you be looking for if you're looking to go into the sector.

JACK LIFTON: Today you should be looking for the company that has the least start up costs to ore concentration - the least - and you should be looking for companies the ore bodies of which have significant commercial quantities of the so-called heavy rare earths. Rather than give you a chemistry lesson I will name them for you. If a mine today - a small mine does not have the metal dysprosium - then you should not invest in it because it will never be able to compete ever with the Chinese, Lynas or Molycorp. Dysprosium is the key heavy rare earth, which is critical for manufacturing rare earth permanent magnets that can operate at high temperatures, such as under the hood of a car or in aircraft or in a spacecraft. This is the real problem in the world - lets say of the estimated 120,000 tonnes of rare earths produced last year, 1% was dysprosium and 100% of that was produced in China. The Chinese, however, are saying they think they're running out of that critical material and they're looking for new sources. So far they tell us they haven't found any new resources in China - you can identify in the world several deposits in Canada, one in Alaska and a couple in South Africa and one or two in Australia that have significant commercially recoverable amounts of this metal dysprosium. But like all rare earth mines, they have all the rare earths and no matter which rare earth mine it is, the principle product will be lanthanum, cerium and neodymium - the light rare earths. Some of them have insignificant heavy rare earths - unfortunately this seems to include Molycorp and Lynas. So each one of them needs to have additional access to deposits so they can add these heavy rare earths - dysprosium is the most important, but there is another one where dysprosium is 1% of all the rare earths produced in the world, terbium which is critical for modern non-incandescent lighting is produced at one-fifth of 1% of the total of rare earths, today and only ever produced in China. So what the industrial end users are looking for in fact is dysprosium and terbium to marry with their neodymium so they can produce magnets and lighting, which is the principle uses for rare earths. This is the big problem and you really have to study the published information of all of these ventures to see if anybody has 1) got dysprosium and terbium in any significant quantity, and 2) whether that venture is small enough to be developed, because there is no way possible, in my opinion, that Molycorp and Lynas - each of which may ultimately need $1billion to come to market and now we have let's say there's a potential in Canada for the worlds largest heavy rare earth producer - that would be Avalon Rare Metals - the problem is Avalon needs more than a billion and they say this themselves, to develop their resource. You have other Canadian companies that have significant heavy rare earths - the one that's farthest along towards the Gulf in the Great Western Minerals Group of Saskatchewan - it's most likely mine to produce rare earths which would have significant heavy rare earths, is in South Africa - a previously operated mine that belonged to Anglo American and went out of production in 1962 for lack of financial interests in those days, it was revived in the late 1990s and went out of business again when the Chinese dropped the price to the point where they went away. I handicap all the stuff and I say that the Great Western deposit in South Africa will probably be the first heavy rare earth producer in the world outside of China within about 24 months. It's a relatively small deposit and although it can supply Great Western internally, which is vertically integrated to making magnet elements, it cannot supply the world with sufficient dysprosium. For that you're going to need Avalon or you're going to need the Canadian company with the American deposit called Ucore Rare Metals, or you're going to need Quest Rare Metals in Canada or Northern Uranium which has nice heavy rare earth deposit in Australia - there are just a few of these companies that I am following. I'm not following the large ones - Molycorp now has a market cap of several billion dollars. I'm going to leave you with one thought - tell me why the market has poured billions of dollars of newly created market capitalisation into rare earth - the last 30 days will not put money into the actual development of any rare earth companies, or bringing them into production. This is share trading - this sis the bubble. What we now need is long-term strategic investment in rare earths and I don't see how all this market trading makes any difference at all.