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Advanced Battery Weekly

© 2016 NAATBatt International • Advanced Battery Weekly • All Rights Reserved April 22, 2016 Vol. 7 No. 17

Summary: For the April 22nd issue of NAATBatt’s Advanced Battery Weekly, we highlight recent sector activities. The NAATBatt, U.S. and Asia Indices increased 3.6% w/w, 5.0% w/w and 8.2% w/w, respectively. The S&P 500 and Russell 2000 Indices were also up 2.6% w/w and 4.0% w/w, respectively. Executive Director James Greenberger writes about recent volatility in the lithium carbonate market and addresses the misperception that recent price increases are driven by limited physical supply. Read “Electric Vehicles and the Commodities Roller Coaster” in the Executive Director's Notes section of the newsletter below. Check out our Members’ Press Releases section after the Key Highlights. New Member: NAATBatt International is pleased to welcome Energy Canvas Ltd. as the newest Silver member of NAATBatt. Based in Vancouver, BC, Energy Canvas is a renewable energy company focused on reliable renewable energy. It specializes in renewable energy generation, energy storage and microgrid systems for remote and edge of grid consumers with a particular focus on diesel displacement. Energy Canvas’ asset development activities and technology focus on creating value throughout the asset's life from inception to operation. For more information about Energy Canvas Ltd., go to: http://www.energycanvas.com/ Key Highlights: • Panasonic and AES are planning a joint project to install a 10 megawatt (MW) energy storage array

at Jhajjar, Haryana (India). Panasonic will be supplying Advancion Certified batteries for this initial project.

• The Southeastern Pennsylvania Transportation Authority (SEPTA) has been selected for a

Federal Transportation Adminsitration (FTA) grant that will enable the purchase of 25 Proterra Catalyst electric buses (ebuses). A feasibility study by SEPTA found that ebuses would cost just $0.27 per mile in electric power to operate.

• Optodot has granted a license to LG Chem under a patent portfolio controlled by Optodot covering

batteries, cells, separators and electrolyte members comprising boehmite. The boehmite is a material used in ceramic coating layers that could improve thermal stability in lithium ion (li-ion) batteries.

• Honda announced that the upcoming Clarity Fuel Cell will be joined by two additional variants, the

Clarity Electric and Clarity Plug-in Hybrid, launching in the U.S. in 2017. The Clarity will be the first vehicle in the industry to offer fuel cell, electric and plug-in hybrid technology on one model platform.

• Siemens and Valeo have signed an agreement to form a 50:50 joint venture (JV) in high voltage

powertrains, components and systems for electric vehicles (EVs). The JV is expected to start operations in 4Q16.

• UQM Technologies announced a collaboration in Colombia with Creatti Labs SAS. The

organizations are working on a transit ebus platform for the operators in Cali, Medellin and Bogota.



• Wrightspeed announced a deal with Infratil-owned NZ Bus (New Zealand based). Under the terms of the deal, the company will provide its powertrain technology – the Route™ 500 – to NZ Bus.

• Domestic car makers are seeking Thailand government support to start investing in EVs.

Automakers will soon start discussions with the Office of Industrial Economics (OIE) regarding support measures to start investments in EVs and for domestic production.

• The Santa Clara Electric Vehicle Charging Center located at the Tasman Parking Garage has

commenced operations. The parking structure features 48 Level 2 chargers and one DC Fast Charger.

• Magnis Resources has produced a >99.95% purity coated spherical graphite anode product from

Nachu graphite using existing commercial scale technology and facilities in North America. The production of this anode product did not require any chemical purification phase with acid treatment (HCl/HF).

• The Chattanooga Regional Transportation Authority (CARTA) is planning to launch - along with

the Tennessee Valley Authority (TVA) - installation of charging stations throughout the city as well as a EV ride share program. CARTA will own the charging stations, but the EV sharing program will be operated by a private firm.

Members’ Press Releases

Honda

Honda Takes Bold Step with Honda Clarity Series; Fuel Cell, Battery Electric and Plug-In Hybrid Variants to Leverage Common Platform http://news.honda.com/newsandviews/article.aspx?id=8959-en A Few More Details: Panasonic and AES are planning a joint project to install 10 MW energy storage array at Jhajjar, Haryana (India). The firms have entered into an agreement to set up a battery-based energy storage project at Panasonic's Techno park manufacturing facility at Jhajjar. Panasonic will be supplying Advancion Certified batteries for this initial project. Source: The Economic Times The SEPTA has been selected for a FTA grant that will enable the purchase of 25 Proterra Catalyst ebuses. A feasibility study by SEPTA found that ebuses would cost just $0.27 per mile in electric power to operate. The vehicles will roll out along the 29 and 79 bus routes in South Philly. Source: Metro and The Inquirer Optodot has granted a license to LG Chem under a patent portfolio controlled by Optodot covering batteries, cells, separators and electrolyte members comprising boehmite. Boehmite is a material used in ceramic coating layers that could improve thermal stability in li-ion batteries. The patent portfolio includes 20 patents issued in the U.S., Japan, Korea, China, and Europe. Source: Optodot Honda announced that the upcoming Clarity Fuel Cell will be joined by two additional variants, the Clarity Electric and Clarity Plug-in Hybrid, launching in the U.S. in 2017. The Clarity will be the first vehicle in the



industry to offer fuel cell, electric and plug-in hybrid technology on one model platform. Following the U.S. launch of the Clarity Fuel Cell in late 2016, the Clarity Electric will go on-sale in 2017. Source: Honda Siemens and Valeo have signed an agreement to form a 50:50 JV in high voltage powertrains, components and systems for EVs. The JV is expected to start operations in 4Q16. Valeo will be contributing its high-voltage power electronics business, including 200 employees of which 90 are based in France. Siemens will be contributing its E-Car Powertrain Systems Business Unit, employing around 500 people of which 370 are based in Germany and 130 in China. Source: Siemens UQM Technologies announced a collaboration in Colombia with Creatti Labs SAS. The organizations are working on a transit ebus platform for the operators in Cali, Medellin and Bogota. Creatti Labs is planning on working with major bus operators that will be bound by Euro 6 regulations to modernize their fleets in order to be able to continue operating their transit routes. Source: UQM Technologies Wrightspeed announced a US $30M deal with Infratil-owned NZ Bus (New Zealand based). Under the terms of the deal, the company will provide its powertrain technology – the Route™ 500 – to NZ Bus. The Route 500 range-extended powertrain is capable of powering vehicles weighing up to 36,000 pounds, in grades as steep as 40%. Vehicles with Wrightspeed's powertrain maintain an estimated 11.1 miles per gallon gasoline equivalent. Source: Wrightspeed Domestic car makers are seeking Thailand government support to start investing in EVs. Automakers will soon start discussions with the OIE regarding support measures to start investments in EVs and for domestic production. The talks will cover corporate income tax incentives, excise taxes and also to determine how Thailand can produce EVs at prices that will be regionally competitive. Source: Bangkok Post The Santa Clara Electric Vehicle Charging Center located at the Tasman Parking Garage commenced operations. The parking structure features 48 Level 2 chargers and one DC Fast Charger. Silicon Valley Power collaborated with the Electric Power Research Institute (EPRI), Joint Venture Silicon Valley, ChargePoint and MJR Electric to obtain a grant of $393,000 from the California Energy Commission to pay for the equipment and construction of the charging center. Source: Silicon Valley Power Magnis Resources has produced a >99.95% purity coated spherical graphite anode product from Nachu graphite using existing commercial scale technology and facilities in North America. The production of this anode product did not require any chemical purification phase with acid treatment (HCl/HF). The li-ion battery tests on Nachu anode product (>99.95% coated spherical graphite) have delivered the following results: • Tap density = 1.21 g/cc • Compressed density = 1.75 g/cc • BET = 1.908 m2/g • Total Ash < 0.05 % • First cycle efficiency = 95% • First charge capacity = 354 mAh/g Source: Magnis Resources CARTA is planning to launch - along with TVA - installation of charging stations throughout the city as well as a EV ride share program. CARTA will own the charging stations, but the EV sharing program will be operated by a private firm. The first phase of the project funds the development, system design,



siting, construction, operation, reporting and management of charging system with approximately 20 locations and also the development of solar energy generation facilities at sites integrated into the local power grid. Source: The Chattanoogan Exhibit 1: Indices Performance (From January 7, 2013)

100

150

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250

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450

500

1/29/2

013

2/12/2

013

2/26/2

013

3/12/2

013

3/26/2

013

4/9/20

134/2

3/201

35/7

/2013

5/21/2

013

6/4/20

136/1

8/201

37/2

/2013

7/16/2

013

7/30/2

013

8/13/2

013

8/27/2

013

9/10/2

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9/24/2

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10/8/

2013

10/22

/2013

11/5/

2013

11/19

/2013

12/3/

2013

12/17

/2013

12/31

/2013

1/14/2

014

1/28/2

014

2/11/2

014

2/25/2

014

3/11/2

014

3/25/2

014

4/8/20

144/2

2/201

45/6

/2014

5/20/2

014

6/3/20

146/1

7/201

47/1

/2014

7/15/2

014

7/29/2

014

8/12/2

014

8/26/2

014

9/9/20

149/2

3/201

410

/7/20

1410

/21/20

1411

/4/20

1411

/18/20

1412

/2/20

1412

/16/20

1412

/30/20

141/1

3/201

51/2

7/201

52/1

0/201

52/2

4/201

53/1

0/201

53/2

4/201

54/7

/2015

4/21/2

015

5/5/20

155/1

9/201

56/2

/2015

6/16/2

015

6/30/2

015

7/14/2

015

7/28/2

015

8/11/2

015

8/25/2

015

9/8/20

159/2

2/201

510

/6/20

1510

/20/20

1511

/3/20

1511

/17/20

1512

/1/20

1512

/15/20

1512

/29/20

151/1

2/201

61/2

6/201

62/9

/2016

2/23/2

016

3/8/20

163/2

2/201

64/5

/2016

NASDAQ Composite Index Russell 2000 AMEX Cleantech IndexNAATBatt Index Advanced Battery U.S. Index Advanced Battery Asia IndexTesla Motors LG Chem Johnson Controls

(Indexed to 100)

Tesl?a Motors at 739

Source: Bloomberg Exhibit 2: Indices Performance

Close on 52-Wk % of 52-Wk PerformanceIndex 4/18/2016 High High LTM YTD Week

Dow 18,004.2 18,351.4 98.1% 1.0% 34.2% 2.6%S&P 500 2,094.3 2,134.7 98.1% 0.6% 43.2% 2.6%NASDAQ 4,960.0 5,231.9 94.8% 0.6% 59.4% 2.6%Russell 2000 1,139.3 1,296.0 87.9% (9.0%) 30.4% 4.1%AMEX Cleantech Index 1,292.7 1,397.4 92.5% (1.8%) 26.6% 2.1%



Source: Bloomberg and ThomsonOne Exhibit 3: Supplier Performance (From January 7, 2013)

0

25

50

75

100

125

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175

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1/22/2

013

3/22/2

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5/22/2

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11/22

/2013

1/22/2

014

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11/22

/2014

1/22/2

015

3/22/2

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5/22/2

015

7/22/2

015

9/22/2

015

11/22

/2015

1/22/2

016

3/22/2

016

FMC Corp (Lithium Supplier) Hirano Tecseed Co. (Coater supplier)Polypore International (Separators) AlbemarleABB Sociedad Quimica y Minera de Chile S.A.Toray Industries Inc. (Separator supplier) Inoue Kinzoku Kogyo Ltd. (Coater supplier)

(Indexed to 100)

Source: Bloomberg Exhibit 4: Commodity Prices

Price on Price on Price on 1 Week 1 MonthCommodity 4/18/2016 4/11/2016 3/18/2016 Change Change

LME Copper (Cash, $ per tonne) 4,797 4,642 5,079 3.3% (5.6%)LME Lead (cash, $ per tonne) 1,711 1,686 1,806 1.5% (5.3%)LME Nickel (cash, $ per tonne) 8,945 8,550 8,610 4.6% 3.9% Source: LME



Exhibit 5: Natural Gas and Crude Oil (From January 3, 2013)

0

50

100

150

200

1/3/20

132/3

/2013

3/3/20

134/3

/2013

5/3/20

136/3

/2013

7/3/20

138/3

/2013

9/3/20

1310

/3/20

1311

/3/20

1312

/3/20

131/3

/2014

2/3/20

143/3

/2014

4/3/20

145/3

/2014

6/3/20

147/3

/2014

8/3/20

149/3

/2014

10/3/

2014

11/3/

2014

12/3/

2014

1/3/20

152/3

/2015

3/3/20

154/3

/2015

5/3/20

156/3

/2015

7/3/20

158/3

/2015

9/3/20

1510

/3/20

1511

/3/20

1512

/3/20

151/3

/2016

2/3/20

163/3

/2016

4/3/20

16

(Indexed to 100)

Source: EIA



Executive Director’s Notes

ELECTRIC VEHICLES AND THE COMMODITIES ROLLER COASTER

This past week parts of the popular press have been in a panic about an alleged worldwide shortage of lithium. Several articles have speculated that a shortage of lithium will derail the trend towards vehicle electrification and challenge the future of companies such as Tesla Motors. See: http://www.smarteranalyst.com/2016/04/21/tesla-motors-inc-tsla-lithium-war-heats-up-after-epic-launch-of-model-3/ In fairness, the price of lithium carbonate has risen sharply since October 2015. This price rise follows about six straight years of historically low and steady lithium carbonate prices. Still, the rally in lithium carbonite, while impressive, can in many ways be viewed as part of a broader rally in general commodity prices, which are showing signs of slow recovery after disappointing performance in the last few years. Some part of the rally in lithium carbonate prices can certainly be attributed to growth in the market for electric vehicles and advanced lithium-ion batteries generally. According to estimates, every 100,000 new electrified vehicles (composed of electric buses (40%), electric sedans (20%), hybrid buses (25%), and hybrid sedans (15%)) will create a demand for 5,000 tons to 8,000 tons of battery-grade lithium carbonate. And vehicle electrification trends are positive, if not yet dramatic. Just this week, Honda announced the launch of two new electric vehicle offerings, the Clarity Electric and Clarity Plug-In Hybrid (see this week’s Member’s Press Releases). It is important to remember, however, that lithium carbonate prices go up and down because it is a freely-traded commodity, not because there is a physical shortage of lithium carbonate in the ground. According to the 2015 U.S. Geological Survey, total worldwide reserves of economically recoverable lithium carbonate are about 13.5 million tons with a total potentially recoverable worldwide resource of close to 40 million tons. To put those numbers in perspective, total worldwide consumption of lithium in 2014 was about 33,000 tons with about 35% of that going into batteries. 2014 lithium consumption



increased about 10% from that of 2013 and is expected to keep increasing as more lithium-based batteries are deployed. Still, it is going to take a long time for actual consumption to make a dent in the physically available resource. And that is without considering the impact of lithium battery recycling, which might add considerably to supply if lithium carbonate prices rise high enough to make recycling an economically attractive proposition. Birds fly south in the winter; commodity prices rise and fall. The high short term volatility of the lithium carbonite market certainly has more to do with the current domination of that market by a limited number of large producers (SQM, FMC, and Albemarle together hold about a 56% market share) than with the ability of companies such as Tesla Motors to obtain physical access to long term lithium carbonate supply. The greatest long term challenge to growth of the electric vehicle market continues to be technological. The rate at which advanced battery technology improves relative to improvements in competing technologies (e.g., hydrocarbon production technologies) will have a far greater impact on the size of the electric vehicle market than the physical availability or price volatility of any metal or mineral.

James J. Greenberger

Executive Director

April 22, 2016



NAATBatt International

Membership Applications for 2016

_________________ Membership Applications and Dues Structure NAATBatt International is accepting applications for membership from companies engaged in the business or applications of advanced electrochemical energy storage technology. Annual membership dues for 2016 are $7,500 for Platinum Members, $5,000 for Gold Members $2,500 for Silver Members, and $1,000 for Public Service Members (not-for-profit and government entities). Affiliates of Platinum Member companies and early stage companies with less than two years of operating history and revenues of less than $500,000 per year may join as special Silver Members for the price of $1,000 per year. Applicants may choose their level of membership based on their desired participation in NAATBatt International. Membership runs for 12 months from the month in which an application is accepted. For details about our membership structure, including a list of the benefits of each class of membership, and a membership application, please click here. Why Join NAATBatt International? NAATBatt International is a not-for-profit trade association of companies, associations and research institutions commercializing advanced electrochemical energy storage technology for emerging, high tech applications worldwide. Our mission is to promote the commercial interests of our members by supporting developments in the science of and markets for advanced electrochemical energy storage technology consistent with the goals of enhancing energy efficiency, reducing petroleum dependence and enabling carbon-free electricity generation. Our members include advanced battery, ultracapacitor and electrode manufacturers, energy materials suppliers, vehicle makers, electric utilities, equipment vendors, service providers, universities and other research institutions. We are a membership-based organization focused on delivering the following benefits to our members:

• Strategic market intelligence • Access to new and emerging electrochemical energy storage technology • Networking and building name recognition within the industry

NAATBatt International conducts multiple programs for its members over the course of the year. One of our most popular programs is our Members’ Site Visit meetings. At these meetings, one NAATBatt member hosts all other members for a tour of the hosting member’s business and production facilities. These tours give participants an unprecedented opportunity to learn about the needs and capabilities of individual member firms. Past hosts of these programs include General Motors, EaglePicher, Duke Energy, EnerDel, Cabot Corporation, S&C Electric, Magna Steyr, DNV-GL, Grafoid, Hydro-Quebec, XALT Energy and Battery Innovation Center (BIC). These programs are open to NAATBatt members only. NAATBatt members also get exclusive information about new products and new opportunities in the market. Each year, NAATBatt runs an Energy Storage Innovation Summit in conjunction with our annual meeting and conference. At the meeting, 20 jury selected emerging companies developing market-ready energy storage-related technologies make presentations directed to companies looking for licensing and



acquisition opportunities. The Summit is the culmination of an industry-wide survey and solicitation for new technologies. NAATBatt members have the exclusive opportunity to participate in the selection process and get a first look at these new technologies. NAATBatt members have access to ABC PatentEdge™, a database of patents and patent applications covering advanced batteries and ultracapacitors developed by NAATBatt in cooperation with the research firm IP Overviews. The database, and the quarterly reports summarizing developments in the database, provide NAATBatt members with deep insight into where advanced battery and capacitor technology is going and where the major players in that market are really making their R&D bets. NAATBatt, as the only international trade association focused on advanced electrochemical energy storage, is a frequent resource for companies looking for products or services involving advanced battery technology. NAATBatt routinely receives inquiries for products and services, which NAATBatt forwards, exclusively, to NAATBatt member firms. For example, NAATBatt recently received and transmitted to its members a solicitation for batteries from a California municipality looking to electrify its bus fleet. This inquiry was transmitted to NAATBatt members well before non-NAATBatt members learned of the opportunity. If you think that NAATBatt membership costs money, think about what not being a member costs. NAATBatt is the pre-eminent networking organization for professionals and companies working in the advanced battery industry. NAATBatt believes that good business relationships are founded on good personal relationships. From our members-only networking dinners, to our Advanced Battery Golf and Tennis tournament, to our annual meetings held at four and five-star resorts, we are dedicated to ensuring the development of strong personal and social relationships among professionals working in the industry. NAATBatt membership is meant to be fun, but it is fun with a serious purpose: Helping our members build bigger and more profitable businesses. NAATBatt is a not-for-profit trade association qualified under Section 501(c)(6) of the Internal Revenue Code and works for the benefit of the entire advanced battery and ultracapacitor industry. Every dollar spent on NAATBatt memberships and programs goes to recouping program costs and to supporting activities intended to benefit the entire advanced battery industry. At a time when it seems that the only people making money on lithium-ion technology are professional conference organizers, the advanced battery industry needs to take control of its own market and its own future. Electrochemical energy storage is the most important technology challenge of our time. Solving the problem of how to store more electricity in a smaller mass is fundamental to progress in vehicle technology, the Smart Grid, robotics, consumer electronics, unmanned aviation, fuel efficient maritime systems, electricity-based weapons systems, medical devices, monitoring systems and many of the other technologies that will shape human society in the 21st Century. Join us in our mission. We are helping to store the energy that will power the world.™



Contact Information:

NAATBatt International 122 South Michigan Avenue, Suite 1700

Chicago, Illinois 60603 (312) 588-0477

www.naatbatt.org

Officers

Davion Hill

DNV-GL Chairman

Bob Galyen Amperex Technology Limited

President

Jean-Pierre Arvers Digatron Power Electronics

President-Elect

Randy Moore

EaglePicher Technologies Chairman Emeritus

Steve Vechy

EnerSys Chairman Emeritus

Zak Kuznar Duke Energy

Chairman Emeritus

Brian Morin

Dreamweaver International Vice President

Ralph Brodd

Broadarp of Nevada Chief Technology Officer

John Butkowski

Beckett Energy Systems Vice President

Michael Lew

Head of Communications

Paula Szyper

Director of Meetings

John Platt

Snell & Wilmer LLP Secretary

Jim Greenberger Executive Director

Sandy Kane

Chief Financial Officer



Member Notices and Advertising

Intersolar/eesNorthAmerica

NAATBattandeesNorthAmericahaverenewedtheirpartnership!Co-locatedwithIntersolarNorthAmerica,eesNorthAmericarunsJuly12-14,2016inSanFranciscoandcoverstheentirevaluechainofinnovativebatteryandenergystoragetechnologies.ThisshowisthebestopportunitytoexploretheopportunitiesforcombiningenergystoragesystemswithPVsolarsystems.IfyouareinterestedinexhibitingatIntersolar/eesNorthAmerica,pleasecontactWesDoane([email protected])

DuetoNAATBatt’scontinuingpartnershipwithIntersolar/eesNorthAmerica,NAATBattmemberfirmsexhibitingattheshow—themostattendedsolarindustrytradeshowinNorthAmerica--areentitledtothefollowingexclusivebenefits:

• 25%boothspacediscount(NAATBattmemberfirmsonly)

• 20%Discountonfirst-classeesconferencepassesattheInterContinentalHotel

• 20%Discountoneesconferenceprogramsponsorshippackages

• Complimentary“ExpoHallPasses”toeesandIntersolarNorthAmerica

ContactJimGreenberger([email protected])orWesDoane([email protected])fordetails.



ThereisstilltimetojoinIMLBinChicago,June19-24,2016!TheExhibitandSponsorshipdeadlinehasbeenextendedtoFriday,April1,2016.

The lithium-ion battery was first commercialized in 1991, but did you know that the FirstInternationalMeetingonLithiumBatteries(IMLB-1)washeldinRomein1982?Now,34yearslater, IMLB-18 is set to bring together the leaders in this technology to discuss the latestresearch and advancements in the field. Do notmiss your opportunity to be a part of thisdistinguishedmeeting!ReasonstoParticipate:

• ThisisthefirstIMLBheldintheUSAsince2002• Speakersfromrenownedcompaniesincluding:BMWGroup,FordMotorCompany,Toshibaand

PolyplusBatteryCompany.• Sponsorsincludeindustryleaders:LGChem,SamsungSDI,ToyotaandNovonixBattery• IMLBisoneoftheleadingresourcesforindustryexpertsfromaroundtheworldandattendees

representanextremelywell-targetedandresponsiveaudience.• NetworkdevelopmentopportunitieswithbothAcademiaandBusiness• NAATBattInternational’sExecutiveDirector,JimGreenberger,willserveashonoraryco-chair

LearnmoreaboutIMLB2016|Viewexhibitandsponsorshipopportunities

Astheexhibitandsponsor lineupcontinuestogrow,werecommendyou lock inyourexhibitlocation and sponsorship options today to guarantee your companies presence at this can’tmiss meeting. Please see our online exhibit and sponsorship brochure for a full listing ofopportunitiesanddetails.

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