By Cyrus S Darabshaw Exclusive To Rare Earth Investing News ^[1]

News of some important developments emanated from the United States this week, which may impact the Rare Earth Elements (REE) business in the long-term. The US House of Representatives Science and Technology subcommittee sits this week on a hearing on rare earth mineral production and the resource's role in the growing clean energy industry.

The subcommittee's agenda is simple - to establish without doubt whether the US faces a shortage crunch on the REE front ^[2], and if so, to initiate research into areas of potential alternatives to rare earth. It will question witnesses about the needs for rare earth minerals and the opportunities to produce more in the United States. The US has the second-largest concentrated rare earth deposit after China. Of late, reports that China's monopoly on the supply of the all-crucial REE required in defence and consumer needs, could prove to be detrimental to the rest of the world. The US lawmakers will look at Chinese monopoly among other issues like re-starting some mines in the US and the western world.

In the second bit of development from the world's only global power, 16th District Ohio Congressman John Boccieri, a Democrat, and his predecessor, Ralph Regula, a Republican, last week stressed their commitment to the mission of the Defense Metals Technology Center (DMTC) in strengthening America's national defense.

Boccieri and Regula made their comments at the DMTC's second annual Strategic Materials Conference. In attendance were about100 military, government, and business leaders from across the country. The Conference focused on America's policy relative to the importance of metal components required in the defense of the nation, including the rare earth elements titanium and beryllium.

The DMTC was established in 2007 through the efforts of Regula, who expressed his continuing support for a national policy on strategic materials. The Defense Metals Technology Center — a US Army Center of Excellence - is based on the campus of Stark State College in North Canton, Ohio and is charged with co-ordinating academic, government, and industrial entities involved with highly specialized strategic materials.

According to the DMTC, Stephen L Luckowski, chief, Materials Manufacturing and Prototype Technology Division, US Army Armament Research, Development and Engineering Center (ARDEC), Picatinny Arsenal in New Jersey spoke on the need to develop a national policy on the use of rare earth metals in military applications. Panels also addressed questions of stockpiling strategic metals and competing with China for rare earth elements.

Many attending the conference reportedly felt that with China attempting to control natural resources, the conference was quite timely.

Debatable

An interesting point of debate hit REE sector this week. Is stockpiling of REEs the way around China's monopoly? Not only China, but Japan and South Korea are believed to be stockpiling strategic metals and REEs. While one section believes so, another group of experts feel that government financing guarantees and investments in the supply chain could be more effective than a physical stockpile to help the US access to REE. If you want to add to this debate, do write in to us.

Meanwhile, US Rare Earths Inc ^[3], a privately owned company, has announced this week that its rare earth element deposits in Idaho and Montana were listed as among the nation's most important domestic deposits in the annual listing of the worldwide distribution of rare earth element deposits ^[4], produced by the US Geological Survey (USGS), the federal government's scientific fact-finding agency covering natural resources. The US Rare Earths properties include Diamond Creek, in southeast Idaho's Webster Range; and a 600-acre site in the Lehmi Pass, at an elevation of about 7,200 feet on the Continental Divide, between Idaho and the Bitterroot Range of Montana.

US Rare Earths' chief executive officer Edward Cowle explained that rare earth elements had become increasingly common in high technology equipment including:  computer hard drives and cellular phones MRI machines environmental products such as electric cars, wind turbines and solar panels military weapons, including the electronic controls and electric motors used in missiles.

US-based production for these important manufacturing and military applications may be in jeopardy because China currently supplies the majority of rare earth elements that are used in these applications.

According to the company's data accepted by the USGS in a study released last September, US Rare Earths' holdings ^[5]show high concentrations of individual rare earths of both the yttrium-heavy rare earths group and the cerium-light rare earths group. They include concentrations of yttrium, cerium, lanthanum, neodymium, praseodymium, samarium, europium, gadolinium, terbium and dysprosium.

Thorium for N-Power?

We had earlier reported on how the US was toying with laser as an alternate to REEs. This report last week caught our eye - the US nuclear sector has set its eyes on a new fuel source: thorium, a silvery-white, radioactive metal, for N-power supply. Thorium is not being toyed as an alternate to any REE but it is considered to be a strategic metal, and a likely substitute to uranium ^[6]. We are only running this story because US Defense circles have now recognized that it is not in its national interests to have strategic materials like nuclear fuels and REE under the control of foreign governments.

Thorium is attractive because of its stability and brilliance at high temperatures, making it ideal for use in heat-resistant ceramics, welding electrodes and even light bulb filaments. The metal is found in trace amounts almost everywhere; with an abundance in the Earth's crust of about 12 parts per million, thorium is several times more prevalent in the soil than its more popular cousin, uranium.

According to the USGS, thorium deposits exist in Australia, Brazil, Canada, Greenland (Denmark), India, South Africa and the United States. In the US, two private companies hold major thorium claims: privately held Thorium Energy, which holds the claim to the Lemhi Pass in Idaho and Montana; and Wings Iron Ore, which holds Pea Ridge in Missouri, a mine whose ores and tailings are rich in thorium and other rare earth metals.

Metal followers seem excited with the news because if thorium-based nuclear power units do take off, thorium consumption is bound to go up since a single gigawatt (GW) reactor is estimated to use a ton of thorium per year.

This belies the fact that the fate of thorium supply is deeply tied to the greater rare earth element supply chain—one that has become increasingly dominated by the Chinese.

Company news

Pacific Bay Minerals Ltd ^[7] (CA:PBM) has reported soil and rock samples strongly anomalous in Rare Earth Elements from the company's 100 per cent owned Cueva del Chacho Property in La Rioja province, Argentina, with values up to 832 ppm Cerium and 338 ppm Lanthanum. A follow up program of sampling and mapping is planned for March 2010.

The strongly anomalous samples were taken in 2006 over zones of elevated radioactivity in an area of poor outcrop exposure during a uranium exploration reconnaissance program. Most of the radioactivity was determined to be caused by thorium, but the two REE results included in the multi-element analysis package, Lanthanum and Cerium, were not reviewed at the time. In view of the newly increased interest in REEs, Pacific Bay is launching further investigation of the property.

The Cueva del Chacho property is located approximately 70 km south-southwest of the provincial capital city of La Rioja adjacent to a major paved road.

EMC Metals Corp ^[8] (TSX: EMC) has formed a joint venture with Jervois Mining Limited of Melbourne, Victoria, Australia, to develop Jervois' world class Nyngan Scandium deposit located in New South Wales, Australia.

"EMC's mandate for growth is to aggressively pursue opportunities in specialty and unusual metals. In December 2009 we acquired TTS Inc and the services of its founder Willem Duyvesteyn, a leading expert in the development of technologies for the recovery of these metals," said EMC's President Peter Bosse. The Nyngan Deposit is located approximately 500 km northwest of Sydney, Australia and is accessible via a 25km sealed road from the town of Nyngan.

Scandium and its alloys, are presently used in the aerospace industry, sports equipment, laser research, specialty welding wire, electronics and high intensity halide lamps.

Ucore Uranium Inc ^[9](CA:UCU) has announced assay results from a prospecting/sampling program completed on the Lost Pond property, located in western Newfoundland. The property is subject to a farm-out agreement with Kirrin Resources Inc (CA:KYM), who is the operator. The property hosts a number of rare earth element and uranium targets which are the focus of an ongoing exploration program.

The company said a 2009 review of prior REE exploration data identified four potential REE targets based on airborne magnetics and radiometric patterns as well as previous assay results obtained between 2006 and 2008. The latest exploration program focused on five additional rare earth targets, two of which resulted in the identification of two new areas of rare rarth mineralization.

Ucore Uranium Inc is a junior exploration company focused on establishing uranium and rare rarth rlement resources through exploration and property acquisition.

Rare Element Resources Ltd ^[10] (TSX-V:RES) has reported REE assay results for an additional ten holes from the 2009 core drilling program, completed on the company's 100 per cent owned Bear Lodge property in Wyoming. All ten holes were drilled into the Bull Hill Southwest target. Assay results had been received for 15 of the 20 drill holes completed during the fall 2009 program. The drill holes reported in a company news release tested for an expansion of the resource along strike to the southeast, and up-dip from previous drill holes.

Rare Element Resources Ltd is a publicly traded mineral resource company focused on exploration and development of rare-earth elements and gold ^[11] on the Bear Lodge property.

The company has also announced a 10,000 meter drill program has commenced on the Clay-Howells magnetite prospect in northern Ontario and the initial hole had been completed. A preliminary examination of the core indicates the targeted magnetite zone was intersected between 35.5 meters and 178.0 meters and is characterized by alternating bands of massive magnetite and heavily disseminated magnetite. Previous analysis of historic drill core from the magnetite zones has shown encouraging results in REE, niobium and iron ^[12].

Stans Energy Corp ^[13] (CA:RUU) has entered into an exclusive 12-month agreement with the "Kyrgyz Chemical and Metallurgical Plant" (KCMP) to option the processing plants that previously isolated and recovered each of the 15 rare earth elements from the Kutessay II mine. The REE mine Kutessay II and associated Kalesay beryllium deposit were recently acquired by Stans and are 100-per cent owned by the company.

The KCMP assets under the option agreement include three plants, the associated equipment and the railway terminal used when KCMP was last in production. Stans will be engaging an independent engineering evaluator to assess the capabilities of KCMP as the company moves towards returning Kutessay II to production.

Rodney Irwin, chairman of Stans Energy, former Canadian Ambassador to Russia, and current Honorary Consul for The Kyrgyz Republic to Canada states, "On behalf of our shareholders, I would like to express our appreciation to the management of Stans in securing the exclusive option for the KCMP complex, which becomes the next step in Stans Energy Corp becoming a near-term rare earth producer."