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Jack Lifton

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  • Auto Batteries: Short Term Revenue Growth Favors Lead-Acid by 6 to 1 [View article]
    Be cautious with regard to Lynas; there is some serious fallout from the Rio Tinto/Chinalco/Industrial espionage arrests of Rio Tinto employees. No matter how this is resolved it is leaving a bad taste with the Australians, and it will both slow down any Lynas deal and change the terms to ones more favorable to Australian ownership being retained even though the amount of money is the same!

    The REE market is reviving, and we're back on track to hit the brick wall of Chinese domestic demand exceeding Chinese domestic supply within 2-4 years. If anyone wanted my investing advice I'd say for the long term "Buy the public REE mining companies that are today well financed and well managed and keeping to their timetable. This is a small group. For the short term you can buy and sell those REE themed stocks getting the most publicity they are mostly only pump and dump schemes, so just be careful where you buy and sell.

    Jim Dines is about to yet again tout rare earths. He's right, but choosing long term REE investments is not easy.
    Jul 16 06:45 PM | Likes Like |Link to Comment
  • Auto Batteries: Short Term Revenue Growth Favors Lead-Acid by 6 to 1 [View article]
    Be cautious with regard to Lynas; there is some serious fallout from the Rio Tinto/Chinalco/Industrial espionage arrests of Rio Tinto employees. No matter how this is resolved it is leaving a bad taste with the Australians, and it will both slow down any Lynas deal and change the terms to ones more favorable to Australian ownership being retained even though the amount of money is the same!

    The REE market is reviving, and we're back on track to hit the brick wall of Chinese domestic demand exceeding Chinese domestic supply within 2-4 years. If anyone wanted my investing advice I'd say for the long term "Buy the public REE mining companies that are today well financed and well managed and keeping to their timetable. This is a small group. For the short term you can buy and sell those REE themed stocks getting the most publicity they are mostly only pump and dump schemes, so just be careful where you buy and sell.

    Jim Dines is about to yet again tout rare earths. He's right, but choosing long term REE investments is not easy.
    Jul 16 06:45 PM | Likes Like |Link to Comment
  • Auto Batteries: Short Term Revenue Growth Favors Lead-Acid by 6 to 1 [View article]
    Be cautious with regard to Lynas; there is some serious fallout from the Rio Tinto/Chinalco/Industrial espionage arrests of Rio Tinto employees. No matter how this is resolved it is leaving a bad taste with the Australians, and it will both slow down any Lynas deal and change the terms to ones more favorable to Australian ownership being retained even though the amount of money is the same!

    The REE market is reviving, and we're back on track to hit the brick wall of Chinese domestic demand exceeding Chinese domestic supply within 2-4 years. If anyone wanted my investing advice I'd say for the long term "Buy the public REE mining companies that are today well financed and well managed and keeping to their timetable. This is a small group. For the short term you can buy and sell those REE themed stocks getting the most publicity they are mostly only pump and dump schemes, so just be careful where you buy and sell.

    Jim Dines is about to yet again tout rare earths. He's right, but choosing long term REE investments is not easy.
    Jul 16 06:45 PM | Likes Like |Link to Comment
  • Auto Batteries: Short Term Revenue Growth Favors Lead-Acid by 6 to 1 [View article]
    John,

    I am phoneless in Canada's Northwest Territories near Yellowknife where I am visiting the mine site of Avalon Rare Metals, which is perhaps the non-Chinese world's best hope for a secure supply of heavy rare earths such as dysprosium and terbium that are critical for allowing permanent magnets to work at the high temperatures under the hood of a car or in an aircraft or missile guidance system.

    There is an American rare earth resource. This is currently privately held Molycorp, which is bringing back to the life what was formerly the world's largest single point rare earth mine just a few miles west from Whiskey Pete's Casino in Henderson, NV. along California's M-15. This mine known as the Mountain Pass Mine is a "light rare earths" resource and is complementary to Avalon's ore body.

    A combination of the two operations would make North American industry independent of China completely.

    Something to think about and sonething to look for....?
    Jul 16 12:23 PM | 1 Like Like |Link to Comment
  • The Tellurium Supply Conjecture and the Future of First Solar [View instapost]
    My last comment of the day. I was part of the team that made the first phase change memory "device" in the period 1962-66, which was invented by my first employer as a degreed scientist, Stanford R. Ovshinsky, who is many things but not at all a charlatan.

    It has taken about 45 years of parallel development in solid state electronics to make the phase change memory practical. As a monument to Stan I can tell you that I made the first working thin-film phase change memory device by layering films of germanium, arsenic, and tellurium and then alloying them in place. Today Samsung uses Germanium, Antimony, and Tellurium. It strikes me as incredible that we came up with almost the correct three elements on the first try. Stan was and is an intuitive genius.

    Remember, dear readers, that Stan also led the teams that made the amorphous silicon thin film photovoltaiccell and the nickel metal hydride battery.


    Jul 12 03:49 PM | 2 Likes Like |Link to Comment
  • The Tellurium Supply Conjecture and the Future of First Solar [View instapost]
    It's amazing to me how the limitations of the amount of natural resources available to us, the human race, are always confused by "experts" with the amount of a chemical element that is distributed throughout the earth's crust, dissolved in the oceans, dissolved in the earth's molten core or the magma above it but below the surface, or distributed in the universe as a whole.

    The only metrics of a natural resource that are important are determined by the necessity of the concentration and location of the ore body being such that the technology available today and the necessary costs of bringing that technology to bear CAN produce the a product at a price that will meet or create a demand.

    Those necessary costs include all of the direct costs associated with:

    Exploring for, discovering, and proving the quality and size of the ore body,
    Developing a specific chemical engineering regime to prodice the desired end product at the mine economically before starting the operation,
    building the access roads,
    building and maintaining and operating the necessary machinery,
    aquiring the existing chemical reagents,
    having electric power or other smelter fuel available,
    finding and training the necessary personnel,
    keeping environmental impact to a minimum, and
    having a ready market for the end products 5 to 10 years after beginning the process of developing the mine.

    Tellurium is very rare.

    If tellurium only were desired, and not copper, there were be no way to economically produce tellurium; it would be simply a very rare novelty. Because in that case the cost of tellurium would include the cost of all of the copper in which it was contained. So far that has not happened.

    There is a free market fantasy that if the price of a commodity goes up in response to an increase in demand then the supply will increase. This is taught at Wharton and put into practice on Wall Street. But the professors and investment bankers have ignored the fact that their "law' only works in a world of infinite resources where costs go down as production increases. This is not the world of natural resources today. Those investors who look for windows of opportunity between the time a demand goes up and the supply commences to bring the prices down are in for a shock in the 21st century.

    The earth is a spaceship it has only so much fuel and other supplies ACCESSIBLE TO US WITH OUR CURRENT COSTS AND TECHNOLOGIES.

    We must all become aware that 90% of the human race has NOT YET BEGUN to use the earth's resources at any level remotely like the useage level in North America and Europe.

    A new paradigm for the USE of rare resources must be implemented.

    We need to stop using and making throw-away products in which rare materials are disseminated, i.e., used in such a way that they cannot be economically recovered.

    The ONE and ONLY METRIC of importance now is the RATE OF PRODUCTION OF A NATURAL RESOURCE. This rate goes up and down with demand, but the open question is: IS THERE A PEAK OF PRODUCTON FOR A GIVEN NATURAL RESOURCE?

    I believe that there are such peaks, and that all of them will be reached before the demands of the 90% are or can be satisfied.

    The reader who talked about the allocation of tellurium to phase change memory rather than solar cell production has illuminated the next "phase' of the problem.

    The US military believes that resource demand and forced allocation due to national intetests could bring about a series of "resource wars" in this century. The resources that the military is following include ENERGY and WATER as well as METALS and Minerals.

    As an example, if you think tellurium is important don't you think that the Chinese, Indians, Chileans, and Russians do also. Have you factored into your risk of supply interruption the demand from those places, or have you just not bothetred to think about it at all?

    The Chinese are, and have been for several years, in the process of ending their export of metals the production of which is domestic (in China) or is controlled by China. Such metals are deemed too important to China's domestic economy to be sold into a foreign market simply for money.

    Price is no longer the only driver in a resource production limited world.


    Jul 12 09:03 AM | 3 Likes Like |Link to Comment
  • The Tellurium Supply Conjecture and the Future of First Solar [View instapost]
    ECD fan,

    What on earth are you talking about? The manufacturing capacity of FSLR has NOTHING to do with the thesis of my article.

    My useage figure per gigawatt comes from the USGS report on tellurium. I never calcualted their cost or selling price per watt, because it is irrelevant to the issue of security of supply. THE PRICE OF TELLURIUM DOESN'T MATTER AT ALL. IT IS THE SUPPLY THAT DETERMINES HOW MANY GIGAWATTS OF CdTe THIN-FILM PV CELLS YOU CAN MANUFACTURE!

    The price determines only whether or not you can sell your product agaianst the competition if the market is unsubsidized.

    Yellowhoard-

    I don't know the marital status of the parents of the owners of 5N+, FSLR's supplier of high purity tellurium, but they may well be holding today an inventory of commercial tellurium valued at as much as $27 million dollars. This has been estimated to be more than 100 tons! I suspaect that their hoard is the largest concentration of tellurium in a small space in the history of the world. If ECD fan is correct about FSLR's capacity then their supplier is holding more than a year's raw material inventory. This is an unusually high inventory for something that is supposedly no problem to obtain, isn't it.
    Jul 11 08:34 PM | 1 Like Like |Link to Comment
  • On Oil's Sesquicentennial, The Dream Becomes a Nightmare [View article]
    Northernpiker,

    The Ph.d. these you cite itself refers to an article by Rade who was a co-author of a 2002 book entitled "The Life Cycle of Copper, its Co-Products and By-Products," published by Kluwer for the World Business Council for Sustainable Development. If the figure for the percentage of tellurium typically contained in copper (the source of the overwhelming majority of our available tellurium) is true then any technology based critically on tellurium is a dead-end commercially. I will be posting a brief article on this particular topic later today, and I had not previously read Andersson's thesis, so I am astounded that I independently chose the word "conjecture" to describe the way that business models ignore the issue of security of supply.

    If you are in the Washington, DC, region you might want to consider attending the "Risk Managemetn for Critical & Strategic Materials" conference to be held there on Oct.20-22. It is aimed at procurement officials for industry and the military, but investors in alternate energy technologies, the natural resource demands of which will be discussed, are welcome. I will be the co-chair of the event.

    Jack Lifton


    On Jul 07 04:40 PM NorthernPiker wrote:

    > In anticipation of your tour de force on material supply issues related
    > to alternative energy technologies, your faithful readers may want
    > to scan an extensive and still relevant 2001 doctorate thesis, “Material
    > Constraints on Technology Evolution: The Case of Scarce Metals and
    > Emerging Energy Technologies”, by Björn A. Andersson. It is less
    > than 50 pages and quite readable with useful graphs.
    >
    > His thesis is germane since it assesses “technology designs within
    > two promising technology domains: thin film solar photovoltaics,
    > PV … and batteries for battery electric vehicles, BEVs.”
    >
    > frt.fy.chalmers.se/PDF...
    >
    > Unfortunately, neither lanthanum nor silver are discussed in the
    > thesis. Silver is a potential issue since it is used as a contact
    > material for silicon solar cells. Here is a November 2006 presentation
    > that addresses silver and other material issues (In, Ga, Te, …) for
    > Terawatt solar cell deployment.
    >
    > www.rio6.com/proceedin...
    >
    Jul 8 07:20 AM | Likes Like |Link to Comment
  • On Oil's Sesquicentennial, The Dream Becomes a Nightmare [View article]
    John,

    Your comment in your latest response to Don that "...some promising AE technologies (NiMH batteries for one) are rapidly approaching the limit of their ability to contribute." is particularly apt in these discussions. No one should, and I ceratinly never would, say that some of the technologies being tried for energy storage aren't brilliantly conceived as "science," but the problem is that no matter how efficient or easily mass produced a technology may be it can still fail the test of practicality.

    The US military is finding to its great concern that many technologies it has adopted and the adoption of which have changed the way it operates are production limited by the availability of the critical rare metals used to make them.

    The problem for both the U.S civilian and the U.S. military sectors is that they have both lazily careened from one resource limited technology to another. Now the sudden and irreversible rise in BRIC economies has added a huge demand for rare metals that has brought the day of reckoning upon them before they have had a chance to address the problem of the security of supply.




    Jul 7 08:53 AM | Likes Like |Link to Comment
  • On Oil's Sesquicentennial, The Dream Becomes a Nightmare [View article]
    The urban legend that Chevron supplressed NIMH battery technology is actually an excellent cover for some of the dumbest decisions ever made by Chevron.

    Chevron entered into a joint venture with a subsidiary of Energy Conversion Devices called, eponymously, Ovonic Materials, Inc to form (C)hevron (O)vonic (B(A)attery (S)(Y)(S)tems, COBASYS, in the late 1990s. The idea was to continue the development of rare earth metal hydrides as electrode materials for Nickel Metal (Rare Earth and Cobalt) -hydride batteries for vehicle electrification.

    Cobasys either had bad management from the beginning, or, perhaps, too much management. It began by sourcing nickel metal hydride powders made to its specification from Ovonic Materials, which was one of two facilities in the western world, in 1999, capable of manufacturing and "charging with hydrogen" nickel(+cobalt)-misch metal (mixed light rare earths) alloys. I believe that the charged powder was then, originally, fabricated into negative battery electrodes by COBASYS and electrolyte and anodes were then added and cased to make batteries for GM.

    The manufacturing of the batteries and the quality control of the Ovonic Materials electrode alloys turned out to be a nightmare and uniform production of the batteries did not happen overnight.

    In the mean time COBASYS' dreams of mass producing NiMH batteries for the GM EV1 and even for the Toyota Prius were dashed by GM's loss of inteerst in the project and by Toyota and Panasonic's superior R&D and manufacturing engineering skills. Soon everyone not making their own batteries was sourcing electrode material from either Chinese owned and operated or foreign owned and operated facilities in China to which Energy Conversion had originally licensed technology in exchange for access to rare earth metals.

    COBASYS never made any money and was a cash burner. It wound up primariloy only assembling NiMH batteries for the few (less than 10,000 in their biggest year, 2007) full hybrids made by GM. The electrodes came from Japan's Sanyo, originally a licensee of Energy Conversion, but by 2003 or 4, miles ahead of COBASYS in NiMH battery component development as was Toyota-Panasonic, also originally a licensee of Energy Conversion Devices.

    By the time that Chevron acquired Molycorp and its rare earth mining site, which could have made, along with COBASYS, a vertically integrated NiMH battery producer out of Chevron the idea had completely faded from the onslaught of cash losses both in COBASYS and the almost moribund Molycorp, which had been acquired by Chevron, as an unwanted part of a deal, when it acceded to a US government request to act as a white knight in the attempted acquisition of UNOCAL by the Chinese National Oil Company, CNOOC.

    Chevron was literally inundated with offers to buy Molycorp in the summer of 2007, and since its Mountain Pass rare earth property had not then produced any new ore since 2002 Chevron was ready to sell. A cosortium led by Resource Capital and including Traxys, a very large trading house, and two investment banks, Goldman Sachs and Pegasus, bought Molycorp and is even now working to bring the mine back to the production of rare earths.

    Ovonic Materials was sold to the Canadian rare earth miner, Great Western Minerals Group, in late 2007 when Ovonic's parent, ECD, decided to narrow its focus to solar cell manufacturing and development only.

    The key to the story is that ECD sold licenses to Toyota, Panasonic, Sanyo, and so forth and so on which gave ECD royalties for any use of the batteries for vehicle electrification. So long as the licensor could argue that the battery was of the "type' licensed then its "use" was covered.

    Chevron, as COBASYS, learned that it could only try to make batteries for licensees but could not itself sell them to new competitors, because the COBASYS batteries were not as good as those of the competitors. The Japanese companies had surpassed COBASYS in the quality of their in-house further development of the NiMH battery, so it was pointless for COBASYS to try to make and sell an obsolescent battery to the original licensees, none of which were going to show COBASYS how to make a superior battery.

    When COBASYS was formed Chevron did not do a proper due diligence. There was never any conspiracy to withold a battery from the market. Chevron simply failed to have sufficient knowledge of the market or the development and use of the technology.




    Jul 6 04:14 PM | 4 Likes Like |Link to Comment
  • A123 Systems Moves Its Planned IPO to the Front Burner [View article]
    John,

    ARRA Battery Grants were targeted at companies that could not get financing from a free market, which requires a return on invested capital in a "reasonable" time. Companies that cobbled together a grant application are all like graduate students who hurry to write up their results at the end of the year, so they can get another year of funding for whatever their advisor has chosen for them to study; they, the ARRA "grants or loan-guarantees" are a sideshow intended to show what I call "depth perception" by the "tone deaf." And, yes, I meant to mix my metaphors.

    The rdiculous business models of the so-called recyclers are a wonder to see. I am proposing an institute or foundation with no ax to grind and no conflicts of interest to take a disinterested look at the issue of recycling precious rare metals, before we pass the threshold of losing so much of our domestic supply of them that technology implementation becomes impossible no matter how good one is with a teleprompter.

    Just one last comment. Cap and trade does not take into account how much it adds to the cost of producing metals in cap and trade limited economies. Watch out for that.

    Jack
    Jul 2 10:04 AM | Likes Like |Link to Comment
  • A123 Systems Moves Its Planned IPO to the Front Burner [View article]
    Have you gentlemen considered the distinct possibility that the main
    value of old batteries will be the net value of their raw materials after the cost of extracting and refining them has been extracted. Note that at present (2009) there is no economical process for recovering the lithium from exisitng battery technologies at a cost less than the cost of new lithium. Lithium's price would have to go up dramatically for any of today's recycling technologies for such batteries to be economical. As for nickel metal hydride batteries I am not aware of any economical recycling processes for them either, although such may already exist but are proprietary.

    The lead used for SLI batteries is, by contrast, today almost all recovered economically enough to account for 85% of the demand for "new" lead for batteries in the USA.

    The ores of metals do not renew themselves; only the creation of a new planet with the makeup of the earth and a few billion years of churning, hydroactivity, and weathering can create and bring to the surface concentrations of metal ores from which the metals themselves can be recovered.

    This urgent recycling issue for the rare earth metals, nickel, cobalt, lithium, and manganese has been eclipsed by the larger issues of the quality and economics of the battery technologies, but we cannot possibly electrify our motor cars without an efficient economical recycling process in place. The idea of wasting our limited resources of rare metals in one time uses as we today waste lithium, nickel, cobalt, and lanthanum in batteries for small and personal electronics is obscene.

    I will be speaking on this issue at the Metals in Aerospace Conference in Seattle, sponsored by Metal-Pages.com between October 6 and 8. I am trying to drum up interest in creating a rare metal recycling research and development institute or company in the USA for which I would volunteer to be the first CEO.
    Jul 1 06:40 PM | 1 Like Like |Link to Comment
  • Auto Batteries: Short Term Revenue Growth Favors Lead-Acid by 6 to 1 [View article]
    All readers of Japanese alternate energy stories take note.

    I can't stand any more mentions of the Sanyo story. It is the result of eother poor journalism-no fact checking!-or poor translation from the Japanese. If all of the lanthanum produced today were used for the manufacture of NiMH batteries for cars and each and every one of them used only 12 kg of lanthanum per battery pack (a low end figure) then there could be manufactured a mximum of 3.5 million such batteries with 2008 production of rare earths.

    BUT

    1. Most of the NiMH batteries EVER made for vehicle use are still in service, so recycling cannot add to the lanthanum,

    2. A large proportion of the newly mined lanthanum is used to make F.C.C., fluid cracking catalyst for the oil industry, and this catalyst material is recycled to produce more catalyst,

    3. The exisitng production capacity for NiMH batteries for the Prius power train is owned and operated by Toyota in-house and has now reached 50,000 units per month.

    4. Sanyo today supplies both Honda and Ford with automotive power train NiMH battery packs at a rate of between 10,000 and 20,000 units per month,

    5. Assume for the sake of argument that one million NiMH battery packs for vehicle use will be made in Japan in the next twelve months by a combination of Toyota and Sanyo,

    6. This will require a miniumim of between 12,000 metric tons of lanthanum and 20,000 metric tons of lanthanum.

    7. This is between 1/3 and 1/2 of the total world supply of new lanthanum expected to be produced in the next twelve months-production has slowed in China due to the recession and industry consolidation so that the stated percentages may, in fact, be too low,

    8. Smaller NiMH batteries and smaller battery packs are made both in Japan and China for use in motorbikes, motorscooters, and personal electronics.

    9. The three demands for lanthanum
    a. F.C.C.,
    b. Prius type full hybrids, and
    c. Smaller transportation power tarins and personal electronics
    Consume the yearly production of lanthanum

    10. Uses a. and c. above are growing so that to increase the yearly production of b. above will take substantial new production of rare earth metals.

    11. To double the production of rare earth metals from a base of 2008 production will take between 5 and 10 years, 5 years if Chinese increases occur along with both new Australian and renewed North American production, and 10 years if only Chinese production increases.

    12. Thus the Sanyo story is either nonsense or a mistake. It may be that Sanyo is increasing the production of NiMH storage batteries of all sizes to 3.5 million a year, but it is very very unlikely that Sanyo will increase its manufacturing capacity and also attempt to increase its production of automotive power train NiMH batteries without any solid customers or security of supply. That kind of financial stupidity is not the Japanese way of doing things.

    Comments are appreciated only if they contain numerical data that counters the above conclusions.

    Jack Lifton
    Jun 29 03:54 PM | 5 Likes Like |Link to Comment
  • Will GM Abandon Hydrogen Cars? [View article]
    I am actually amused by the contrast in the statements between the US Secretary of Energy, Nobel Prize Recipient, Dr. Steven Chu, who said that hydrogen cars are too far in the future for funding now and the GM "Western Region" Environmental Affairs Manager, Mr. Barthmuss, who "noted that GM already has invested billions in developing hydrogen cars."

    Perhaps in this divergence of views we see the real reason that GM went broke.
    Jun 26 08:55 AM | 6 Likes Like |Link to Comment
  • How Short Term Supply Constraints Will Impact Booming HEV Markets [View article]
    John,

    As it happens this weekend I have spoken at length with Dudley Kingsnorth in Perth Australia., and corresponded by email and phone with David Kennerdy in Birkenhead (Liverpoole) UK. Respectively they are the world's leading authority on the market fundamental of rare earths and the only man in the west who engineers and produces rare earth magnet alloy powder (rare earth magnets are made by sintering alloy powders either of samarium-cobalt or of neodymium-iron-boron). Both of these gentlemen are scheduled to be on a panel with me (Mr. end-use of rare earth metals "expert") in Washington, DC, in October.

    In any case we all agree that NiMH battery production is severely resource production rate limited. I googled ""lanthanum production" and 2008" just to see what info is out there and lo and behold I got an article on the new "Chinese Rare Earths Society" web site that is almost word for word constructed of quotes from me! My articles are also featured on their site. I'm one of their key sources of the production levels of the rare earths. Dudley and David are of course my most reliable sources, but they don't write as much as I do, publicly.

    The point of this immodest rant is this: Reasonable men can disagree on the total of accessible resources (known and measured) and reserves (implied and extrapolated) of the rare earths, but no one disagrees that any increase in output rate of metals and minerals is a market issue. No one is arbitrarily making the massive and long term payout type of investment required to increase the output of a mine and to increase the refining capacity for the mine's product and the manufacturing capacity for the end use of the mine's refined product just based on newspaper stories or market hype. This is as true for lithium as it is for rare earths.

    Note well that the use of lanthanum to make fluid cracking catalysts to process increasingly lower grades of petroleum resources may be the largest use today of lanthanum. If this is so then the availability of lanthanum for NiMH batteries may only be half of what we think. I was at Molycorp's Mountain Pass mine two weeks ago, and they told me that all of their current lanthanum production, only 4 tons a day at the moment, goes to FCC production. They plan to ultimately ramp up to 32 tons/day, but their FCC customer is interested in all of that. Note that Toyota has just announced the addition of hybrid lift-trucks to their line. Those NiMH batteries are big ones. Toyota is a marketing genius. Instead of having one lift truck working and one or two charging you can have a hybrid running all the time. If the cost increase and the reliability and durability and maintenance are equal to the ICE powered lift truck and the cost per unit is less than double it's a great deal.

    I think that the shortages and their causes -market dynamics-cannot be hidden much longer. Choices have to be made. As you say in the near term there is no choice but lead-acid technology for widespread application in transportation.

    Best regards,

    Jack
    Jun 21 11:50 AM | 9 Likes Like |Link to Comment
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