From the outset of Molycorp's re-emergence in 2008, we have remained committed to a "mine to magnets" vertical integration strategy, ensuring that the company could produce high quality rare earth materials in all five stages of the rare earth value chain.

Right now, Molycorp is already producing commercially available material in four of the five stages, and we announced on November 28, 2011, that we have formed a joint venture with Japan's Daido Steel, Ltd., and the Mitsubishi Corporation to manufacture neodymium-iron-boron (NdFeB) magnets.

The rare earth mine-to-magnet manufacturing supply chain is shown in more detail below.

	Stage 1: Mining Global Production: ~97% produced in China Molycorp Business: Molycorp Mountain Pass Molycorp has mined and milled rare earth elements at Mountain Pass for nearly 60 years. The company restarted active mining in December 2010, and once the modernization and expansion of Mountain Pass is complete, we will have the capability to greatly scale our mining of rare earths. However, mining is roughly only 10% of our work. The bulk of what we do - and the capital necessary to produce commercially viable rare earths materials - is captured in Stage 2 below.
	Stage 2: Material Processing Global Production: ~97% produced in China Molycorp Business: Molycorp Mountain Pass and Molycorp Sillamae The second stage in the rare earth value chain is the production of purified rare earth oxides. This is the most complicated and difficult step in the rare earths manufacturing process. At this stage, the individual rare earths have to be separated from one another. Given that they are all very close to one another in atomic weight, the separation process requires sophisticated and complex chemical processing to isolate the individual rare earths and purify them for use in commercial products. In this stage of our production, we are integrating a variety of new, proprietary processing technologies that, among other advances, dramatically improve our recovery rates and enable us to recycle our wastewater and convert it into the reagents used in our process. Together, these new capabilities help to lower our costs and, at the same time, set a new global standard of environmental performance for rare earth production. Molycorp once produced the majority all of the world's rare earth oxides. While China has dominated the market in recent years, Molycorp will once again emerge as a high volume global producer of rare earth oxides by the end of 2012.
	Stage 3: Metal Making Global Production: ~100% produced in China Molycorp Business: Molycorp Tolleson and Molycorp Sillamae From the oxide form, rare earths can be converted into metal. This stage is currently a key chokepoint in the global rare earth supply chain, as China produces nearly 100% of the world's rare earth metal. Molycorp's facilities in Sillamae, Estonia, produce didymium metal, a combination of neodymium and praseodymium, at commercial scale, as well as the rare metals niobium and tantalum, and Molycorp Tolleson has the capability to produce a variety of rare earth and other specialty metals in small batches. Molycorp is currently working on redeveloping commercial scale metal production in the U.S. in a manner that is consistent with the company's deep commitment to superior environmental performance and worker safety.
	Stage 4: Alloy Manufacture Global Production: 80% produced in China, 20% in Japan Molycorp Business: Molycorp Tolleson In the fourth stage, the rare earth metals are converted into alloys. China maintains the vast majority of global alloy production, but Japan holds a 20 percent share of the market.  Unlike other stages of the rare earth supply chain, this particular stage is governed by intellectual property (IP) protections, at least for neodymium-iron-boron (NdFeB) alloy . Thus, to produce this alloy, producers must have access to the IP. Our Molycorp Tolleson facility is now producing neodymium-iron-boron (NdFeB) alloy because it has access to that important IP.
	Stage 5: Magnet Manufacture Global Production: 80% produced in China, 17% in Japan, 3% in Europe Molycorp Business: Molycorp in joint venture with Daido Steel and Mitsubishi Corp. to manufacture NdFeB magnets The final stage in the Mine-to-Magnets supply chain is the production of rare earth magnets. Lightweight, high-powered neodymium-based magnets and the samarium cobalt magnets are used in wide range of commercial and military applications and are in very high demand. China produces 80% of the world's magnets, but there is some diversity of supply in this important stage, with Japan producing 17% and Europe producing 3%. On November 28, 2011, we announced that we have formed a joint venture with Daido Steel and the Mitsubishi Corporation to manufacture NdFeB magnets. The joint venture will use new and novel NdFeB manufacturing technology that that does not depend on the use of patents held by other magnet companies.  The technology allows for the manufacture of permanent rare earth magnets that deliver greater performance with less reliance on dysprosium, a relatively scarce rare earth.  The process also results in higher production yields.