It's the companies with the HREE's That are going to make it to the top. Without them they are all going to fail. Rare earths consultancy Technology Metals Research (TMR), no stranger to controversy, has stirred up debate again after founder Jack Lifton told Reuters on November 1 that “the vast majority of non-Chinese rare earth metal ventures will fail.” Molycorp leading the charge outside of China Lifton’s pessimistic outlook will come as a disappointment to those who are hoping companies outside of China can fill the rare earths supply gap that has grown in the wake of China’s decision to tighten export and production quotas of rare earths.China capped domestic production for 2011 at 93,800 tonnes of rare earth oxides (REO), while exports were limited to 30,184 tonnes, down 40 percent from just two years ago. They are scheduled to release their rare earths production and export quotas for 2012 later in November.Optimists, on the other hand, will point to a recent announcement from Colorado-based Molycorp Inc. (NYSE:MCP), who revealed on October 20 that they will be opening a new processing plant in California months ahead of schedule.The new plant is slated to come online in early 2012, and to coincide with the early start for the new facility, Molycorp also announced they would soon be restarting operations at their Mountain Pass mine in order to build stock for the plant.HREEs critical to survival in REE sectorDespite many analysts’ belief that these latest developments from Molycorp bode well for the company, there has been some criticism of Molycorp’s Moutain Pass project, which is skewed towards light rare earth elements (LREE), as opposed to heavy rare earth elements (HREE) such as dysprosium, terbium, and yttrium, which fetch a much higher price.Lifton falls into this camp, and believes that most companies that aren’t mining HREEs will simply not be able to turn a profit due to the expensive separation process.“You don’t want the biggest deposits, you don’t want to have to process hundreds of tonnes at horrendous cost. You’re looking for the highest grade heavy rare earths and the least cost to recover them. It’s a question of economics,” Lifton said.“In terms of investment, the best bet are the companies that will be producing the heavy rare earths that will be in deficit in the future,” he added.Bodes very well for Matamec coming online with Toyota to mine their HREE's.