The US Treasury Department has pledged a tax credit to certain mining companies able to process critical minerals into final products needed for green technologies.
Earlier in December, US authorities proposed the so-called 45X tax credit which offers a 10% production credit for US-made products. However, the draft document excluded raw materials from the production costs in favor of processing. For example, the mining of lithium would not have received the credit, but the processing of that lithium into a form usable to build a battery would.
Mining industry spoke against this notion, saying that processing is impossible without first extracting a mineral. In the end, the Treasury Department issued a statement that "material costs and extraction costs" would be eligible for the tax credit under the final 45X rules, "provided certain conditions are met."
"This will not only help incentivize additional mining, but will mean that mining that already exists is more profitable and they can make greater investments in those mines," said deputy Treasury secretary Wally Adeyemo.
The department’s final ruling says that “the action of extraction alone does not produce an eligible component” for the tax credit. The National Mining Association, whose members include Lithium Americas, ioneer Ltd INR.AX and other mining companies that do not process metals, said it appreciated the updated rules but was disappointed they were linked to processing.
Theodor Lisovoy, Managing Editor, Rough&Polished
