Rare Earths Thorium Resource Independence Without Mining A

Rare Earths & Thorium Resource Independence Without Mining A Recent History & Probable Future James Kennedy President of Th. REE Consulting Presentation to the Thorium Energy Alliance Conference #8 | St. Louis, Missouri August 21 – 22, 2017 1

Th-REE / Origins of Interrelation: 1 • Geologically Thorium is commonly found with heavy rare earths • Historically all western production of heavy rare earths were a byproduct of some other commodity • In 1980 the U. S. Nuclear Regulatory Commission and the International Atomic Energy Agency altered existing guidelines on the definition of “source material*” • This regulatory change effectively terminated all western heavy rare earth production and jump-started China’s rare earth mining industry to global prominence • Ultimately all western metallurgical and value adding technology migrated to China – the only resource producer for these materials *Source Material is defined as feedstock for nuclear fuel. The definitional threshold is any concentration 2 of Uranium or Thorium above. 05%, per 10 CFR 40, part 75

This Redirection of a Micro-Commodity-Market Has Altered the Course of Human History in a Profound Way China, insightful of rare earth’s economic potential, committed state resources toward developing a multi-leveled monopoly that would eventually be able to force the relocation of the most advanced technologies in the world inside China U. S. leadership never noticed… After all it was “The End of History” (Ref. Francis Fukuyama) and the rewards of capitalism would never stop flowing This endless self-delusion put the future of Western Civilization in jeopardy and has grossly marred our place in history 3

A Possible History Lost (or misplaced ? ): 2 In 1962 Glenn Seaborg Reported to President Kennedy that America’s sustainable energy future could best be realized with the development of Thorium “Breeder Reactors” (a Variation on MSR) In 1972 Alvin Weinberg, inventor of the Light Water Reactor (LWR) and Molten Salt Reactor (MSR), appealed to California Congressman Chet Holiefield, Chairman of the Joint Committee of Atomic Energy, that LWRs were inherently unsafe (at some level) and that the future of safe nuclear energy was in the Molten Salt Reactor Chairman Holiefield, closely aligned with Westinghouse, General Electric and President Nixon’s Fast Breeder Reactor program, chastised Weinberg stating "if you are concerned about the safety of reactors, then I think it may be time for you to leave nuclear energy“ and later had him terminated from his post as the head of Oak Ridge; effectively terminating the MSR reactor program 4

Assessing Lost Opportunity / Measuring a Possible Future Because of the NRC / IAEA regulatory change the U. S. mining industry continues to dispose of rare earths in such quantities, on an annual basis and recoverable at sub-mining costs, that could easily supply over 85% of world demand The corresponding thorium byproduct, if utilized in an MSR, could easily meet 85% of the world’s energy needs with no corresponding GHG emissions All of this without opening a single new mine…, All the while western governments invest blindly into hair-brained renewable projects that would strip-mine the world for rare earths and copper to build wind turbines and solar panels that rely on Natural Gas as our sole source for base-load energy Can these lost decades of accumulated waste ever be mended 5

The cost of lost American opportunity, global prosperity and harm to the environment is a debt we pass on to those who follow All future generations will begin their lives indentured to the debt of our folly: a secular original sin of our own creation 6

Redemption: 3 TEA and Th. REE have spent the last 9 years trying to unite and salvage these lost opportunities within our broken political system Our proposal would allow thorium bearing rare earths to be fed into a multi-national rare earth value chain. The corresponding thorium would pass into a privately funded multi-national corporation capable of challenging China in a global marketplace where China can operate at zero margins for decades, like Amazon, in its quest for global energy Hegemony 7

Over the past 9 years we have had hundreds of meetings with Congressional Members and staff. We have had multiple meetings with the House and Senate Energy & Armed Services Committees, the Pentagon, the White House OSTP, the NSC & NEC and the OMB from past and current Administrations We have had meetings with the current Administration at the Policy Director level and the Cabinet level Today and tomorrow you will hear from a few friends of TEA who have helped us navigate this broken system: people committed to reclaiming America’s possible future 8

Introduction 9

From the 1980 USGS Minerals Yearbook: The Magic Moment when China begins to sell rare earths NOTE: Individual Rare Earth metals already far exceed U. S. consumption of Rhenium. 10