Shocking Future Battering the Lithium Industry …

1 Shocking Future Battering the Lithium Industry through 2020 Edward R (Hons)., Dpl.(Marketing Research)., MBA., FCIArbTRUG roup Copyright TRU Group Inc 2011 May be quoted with reference to TRU onlyHistory of this update 20119 Update presented at IM January 2009 Santiago 9 Periodically tracked and updated by TRU 9 Major update and restructuring last month 2010 Copyright 2011 TRU Group IncSlide 2 Outlook ObjectiveTo develop a base case demand-supply forecast for the global Lithium market through 2020zlithium consumption by main end-usezlithium sources of supply brine & mineralzmain determinants of demand and supplyzestablish demand-supply balance and impacts-main purpose is supply-demand

2 Balance through 2020. Copyright 2011 TRU Group IncSlide 3 TRU Approach Strong Qualified Team Brine, Mineral Mining, Extraction and Processing Basic & Intermediate Lithium Chemicals Engineering Processing Lithium End-using Industry Experts Modeling, Technology Forecasting, Market Research, Cost Analysts Clear Proven Track Record Several multi-billion-dollar, High Tech Li-Chemical and Lithium Juniors as Clients Numerous Engineering, Feasibility Studies and Due Diligence CompletedProfessional Independent Bankable2009 Santiago Forecast CorrectD Sustainability on Supply Side Sustainability on the Demand Side Copyright 2011 TRU Group IncSlide 4 Mapped Industry Structure Copyright 2011 2011 TRU Group IncSlide 5 Model Update 2011 Demand Side Recession 2009-10 deeper and more global Recession recovery only in 2011 Supply Side New Lithium projects proceeding whatever?

3 Probability of project cancelations, delay and (technical + business)failures! Copyright 2011 TRU Group IncSlide 6 Demand Curve Copyright 2011 TRU Group IncSlide 7- Total Global Lithium Demand - History and 2010-2020 Li-contained t All Lithium demandlithium contained t10,00015,00020,00025,00030,00035,00040, 00045,00050,0002002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 YearLithium Contained tAll Lithium DemandBatteries Impact High Copyright 2011 TRU Group IncSlide 8 Battery Impact on Total Global Lithium DemandHistory and 2010-2010 Lithium in All BatteriesTotal Lithium Demandt Li-contained% Batteries of Total 1,0006,00011,00016,00021,00026,00031,000 36,00041.

4 0002002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 YearLithium Demand t Li-contained0%10%20%30%40%50%60%70%80%90 %100%% batteriesLithium in All BatteriesTotal Lithium Demand% BatteriesUser Segment Patterns Copyright 2011 TRU Group IncSlide 9 Lithium Consumption by End-Use History and 2010-2020 BatteriesCeramics GlazingGlass DirectAlloy & Other02,0004,0006,0008,00010,00012,00014 ,00016,00018,0002002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 YearConsumption t Li-containedBatteriesAir ConditioningAl Process AddCeramics GlazingGlass DirectLubricantsPharmaceuticalsPolymer ProcessSynthetic rubberAlloy & OtherOtherOtherBattery Use of Lithium by Type Copyright 2011 TRU Group IncSlide 10 Battery Typet Li-contained% total% total% total05-10 10-20 Primary Batteries26%19%8%7%9%Secondary Batteries74%79%49%15%13%EV Batteries0%2%43%316%64%ALL BATTERIES100%100%100%14%14%% Growth pa200520102020 Electric Vehicle

5 Production Outlook by Type Copyright 2011 TRU Group IncSlide 11 Electric Vehicle Production Outlook by Type 2010-2020 Most Likely Scenario World Electric Vehicle ProductionAll HEVPEVHEVPHEV0500,0001,000,0001,500,0002 ,000,0002,500,0003,000,0003,500,0004,000 ,0004,500,0002002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 YearNumber of VehiclesWorld Electric Vehicle ProductionAll HEVPEVS eries5 HEVPHEVE lectric Vehicle Li-Battery Development Fundamentals Copyright 2011 TRU Group IncSlide 12 Electric Vehicle TypeHybrid Electric Vehicle2011 Plug-in Hybrid Electric Vehicle2014 Plug-in Electric Vehicle2015 Fuel Cell Vehicles2018 Year Technical Issues Resolved for Lithium BatteryUser Segment Overview Copyright 2011 TRU Group IncSlide 13 USE SEGMENT - t Li-contained% total% total%

6 Total05 - 1010 - 20 Air Conditioning8%7%4% Process Add4%3%1% Glazing12%10%6% Li Add23%26%17% Process4%4%2% rubber4%4%3% Plus Alloy22%15%11% USES Li-contained100%100%100% Uses Demand77%74%83% Direct23%26%17% Growth pa200520102020 Supply ClassesLevel I: Supply from Existing PlantsLevel II: Pipeline Projects Supply 2010-2015 Level III: New Developments Supply 2015-2020 Copyright 2011 TRU Group IncSlide 14 Notable Supply low-cost (brine-based) plants can expand significantlyii. Emerging technologies provide new options for medium-scale Lithium developments *iii. Mineral-based supply (for basic Li chemicals)

7 Could be a back-up for supply with price escalation Copyright 2011 TRU Group IncSlide 15* selective ion adsorption, electrodialysis, nanofiltration, etcSupply All Li Grades by Stage Copyright 2011 TRU Group IncSlide 16 Supply Staget Li-contained% total% total% total 10-1515-20 Existing Plants79%67%60% Plants0%16%15% Developments0%3%14% - - Glass Use Direct20%14%11% Lithium Supply100%100%100% % Growt201020152020 All Grades Supply Pattern Copyright 2011 TRU Group IncSlide 17 Lithium Supply by Project Stage 2010 - 2020t Li-containedSupply from All Souces Mineral and BrineExisting PlantPipeline ProjectsNewDevelopmentsMinerals Glass Direct2,00022,00042,00062.

8 0002007200820092010201120122013201420152 0162017201820192020 YearSupply by Development Stage t Li-containedAll SupplyExisting PlantPipeline ProjectsUnder DevelopmentMinerals Glass DirectAll Lithium Supply-Demand Copyright 2011 TRU Group IncSlide 18 Underlying Total Lithium Industry Balance2010-2020 All Lithium SupplyAll Lithium Demand10,00020,00030,00040,00050,00060,0 002002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 YearLithium Contained tAll Lithium SupplyAll Lithium DemandChemical Grade LithiumSupply Band vs. Demand Copyright 2011 TRU Group IncSlide 19 ALL Pipeline Projects Plus Existing Plant Supply versus Chemical Grade Demand 2010-2020t Li-containedChemical Grade Li DemandExisting TotalSupplyExisting Total Supply Plus Pipeline Projects10,00020,00030,00040,00050.

9 0002002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 YearLithium Contained tChemical Grade DemandExisting Total Chemical Grade SupplyTotal Plus Pipeline Projects Brine-based supplyChemical GradesLithium Market Balance Copyright 2011 TRU Group IncSlide 20 Market BalanceTotal Supply versus Chemical Grade Demand2010-2020t Li containedChemical Grade DemandExisting TotalSupplyTotal Supply Existing + Pipeline + New DevelopmentsAnnualBalance - t Li-contained - 10,00015,00020,00025,00030,00035,00040,0 0045,00050,00055,000,2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 YearDemand-Supply t Li-contained10,0005,00005,00010,00015,00 020,00025,000,Balance t Li-contChemical Grade DemandExisting Plan SupplyTotal Plus RinconBalance tHow & Why Shocking ?

10 Massive Lithium oversupply through 2020 Massive Lithium oversupply through 2020 Very few projects survive of sixty plusVery few projects survive of sixty plusExploitation and misuse of 43 Exploitation and misuse of 43--101 reporting101 reporting Qualified PersonsQualified Persons who are far from it!who are far from it! Lithium chemical engineers who are notLithium chemical engineers who are notInvestors will predictably lose millionsInvestors will predictably lose millionsStock market regulators asleepStock market regulators asleep Copyright 2011 TRU Group IncSlide 21 Lithium Price Outlook 2020 Copyright 2011 TRU Group IncSlide 22 Model Suggests.