Column: Trump 2.0 won’t reverse Biden’s critical minerals push
Donald Trump has described the Inflation Reduction Act (IRA) as a "green scam" and vowed to repeal it after he returns to the White House in January.
The US has spelled out new rules for tax credits manufacturers can receive for domestically producing parts necessary for the energy transition — and there’s a clear divide for miners and processors.
Companies that mine lithium, nickel, cobalt, gallium or the other 46 minerals deemed critical by the US cannot receive a 10% production tax credit for extraction or acquisition of those raw materials, according to Treasury Department guidance published Thursday.
The incentive also won’t be available for procuring batteries to extract the raw materials for recycling, something firms such as Redwood Materials Inc. and Li-Cycle Holdings do. The benefits are part of the Biden administration’s Inflation Reduction Act.
The credit is part of a broad number of tax breaks that manufacturers of clean-energy products will get for production costs, including labor and electricity use. Alcoa Corp. and Century Aluminum Co. are both poised to receive the full benefit of the so-called 45X tax credit, as aluminum production is a refining process that converts alumina — taken from bauxite — into the lightweight metal.
“Guidance appears to take a restrictive view of eligible ‘production costs’ for designated critical minerals,” TD Cowen analysts wrote in a note to clients. The way the analysts see it, costs eligible for the tax credit “would be narrowly defined to those directly tied to the mineral processing.”
The National Mining Association, which represents more than 250 companies, said the measures fail to incentivize secure and reliable mineral supply chains and called the guidance a “misreading of the law” that will increase headwinds created by China.
(By Joe Deaux)
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