Industry and Information Bulletins

In our ongoing efforts to provide you with broader communications and industry information, we are pleased to issue another Industry Bulletin discussing recent trends in the markets of various rare and strategic metals.

This edition reports on some of the highlights from the Blendon Industrial Minerals 2008 conference held in Toronto on October 21st and 22nd. The conference, attracting some 100 national and international delegates, heard from industrial minerals producers, service providers, project developers, and end users.  Ian London, Avalon´s Vice President, Corporate Development, was an invited speaker and provided an update on Avalon´s lithium and calcium feldspar projects, with a particular emphasis on their respective contributions to reducing energy demand and carbon footprint in the glassmaking industry. These minerals, individually or together, can serve as powerful fluxes in a blend with other batch components causing the batch to melt at lower temperatures, thus reducing energy inputs and CO2 emissions from the furnaces which are typically fuelled with natural gas.

Glass producers within the North American Glass Industry continue to explore a wide range of solutions in order to strengthen their commitment and policy objectives around sustainability. On October 28th, Owens Corning announced its Greenhouse Gas Reduction Goal whereby it will reduce its total U.S. greenhouse gas emissions by 25% per unit of production from 2006 to 2012. Owens Corning committed to this new goal as part of the U.S. Environmental Protection Agency´s (EPA) Climate Leaders voluntary program.  

http://www.owenscorning.com/sustainability/

Earlier this year, PPG Industries set a goal to reduce its total energy intensity by 25% from 2006 to 2016 and its total global greenhouse gas emissions by 10% from 2006 to 2011. 
 
http://findarticles.com/p/articles/mi_m0EIN/is_2007_Dec_19/ai_n27479999

Avalon is well positioned to eventually benefit from this growing trend toward reducing energy demand and carbon production in the glass industry, through production from its large resources of lithium minerals at its Separation Rapids Project and calcium feldspar at its Warren Township Project, in the Northern Ontario.  Avalon continues to work toward this goal along with glass manufacturers, industry associations and the academic community to find batch solutions which reduce energy consumption by substituting its lithium and calcium feldspar products. In addition to the energy-saving benefits and reduced CO2 emissions, these products can also enhance the physical properties and value of the end products. Mr. London´s presentation to the Blendon Conference can be found on Avalon´s website at:

http://www.avalonventures.com/_resources/media/Industrial_Minerals_21Oct08.pdf

Among the many interesting speakers at the Blendon Conference, two in particular provided interesting insights, not specifically related to glassmaking, but into lithium markets and rail transport, both of relevance to Avalon.

David Miller, General Manager/Strategic Development for Australia-based Talison Minerals Pty Ltd., provided an informed overview of the growing demand, supply chain and sources of lithium-based products. Miller noted that while lithium mineral markets traditionally support the glass/ceramics sector (representing 25% of the total lithium demand in 2007), and that lithium chemicals sourced from brine operations are generally used for batteries, lubricants, pharmaceuticals, refrigeration and aluminum applications, lithium minerals are now also being used as a source for lithium chemicals.  As such, lithium minerals are now the source for 40% of the overall supply for lithium products for all industries.  

Mr. Miller projected that the strong demand forecast for lithium-based products will continue, with new applications on the horizon. The most notable, of course, is the automotive sector where the first lithium battery powered vehicles are expected in 2009 with exponential growth expected beyond 2011. Miller did however caution that there is some uncertainly around any growth rate projections as there is not as yet an industry consensus or commitment to any one vehicle type or battery technology. 

http://www.talison.com.au/pdfs/Lithium_Industry_-_Talison_Presentation_to_Canadian_IM_Conference_2008.pdf 

John Gray, Senior Vice President of the Association of American Railroads and Helen Borges, Director General of Transportation Canada reviewed current regulations, the physical conditions and upgrades required to the rail networks over the next 20 years, and new developments in bulk rail transport. Any improvements in these areas are important to industrial minerals producers as the costs and scheduling logistics related to the handling and moving of bulk product represent very significant cost factors that can "make or break" a project.

If you have any comments or questions, please do not hesitate to post them on Avalon´s official investor relations hub at http://www.agoacom.com/ir/Avalon.

Regards,

AGORACOM Investor Relations