Alcoa and Sibanye-Stillwater have welcomed the final regulations of the Section 45X Advanced Manufacturing Production Credit, introduced as part of the Inflation Reduction Act (2022) (IRA).
The IRA is considered to be the largest climate investment in US history. The legislation encourages innovation by giving firms various demand- and supply-side incentives to invest in developing and deploying clean energy technologies, while helping the country transition to net-zero.
On October 25, the US Department of the Treasury and the Internal Revenue Service released the final rules for the Section 45X Advanced Manufacturing Production Credit, which aims to provide additional clarity and certainty to drive more investment in clean energy and critical minerals.
The changes are set to:
- clarify definitions and confirm credit amounts for eligible components, including solar energy components, wind energy components, inverters, qualifying battery components, and applicable critical minerals
- define key terms to incentivise production in the US and clarify the circumstances in which taxpayers can claim the credit
- finalise important safeguards to prevent potential fraud, waste, or abuse, including safeguards against duplicative crediting of the same component, crediting of activities that are not value-added, or extraordinary circumstances in which components are produced but not put to productive use.
The Advanced Manufacturing Production Credit aims to level the playing field for US companies producing critical clean energy technologies onshore, expanding the country’s clean energy manufacturing base, creating lucrative jobs, strengthening energy security, and building the reliable and responsible supply chains needed to meet climate goals.
The final rules are set to largely benefit the mining industry as they will accelerate the buildout of domestic critical mineral supply chains by allowing taxpayers to include materials costs and extraction costs in production costs for applicable critical minerals and electrode active materials, upon certain conditions being met.
The changes have been welcomed by Alcoa, which described Section 45X Advanced Manufacturing Production Credit as an important tool for shoring up domestic manufacturing of critical materials, including aluminium that Alcoa produces in Newburgh, Indiana, and New York.
“The aluminium produced at these facilities plays a crucial role in multiple domestic manufacturing segments including clean energy, automotive, aerospace and building materials,” Alcoa said.
Sibanye-Stillwater also welcomed the changes, specifically praising the US Government’s foresight and willingness to understand the mining industry and its operations.
“We firmly believe that such proactive and supportive legislation will deliver real benefits for mining and processing critical minerals in the US,” Sibanye chief executive officer Neal Froneman said.
“This will ensure the future sustainability and growth of the regional critical minerals value chain in a responsible manner.
“The final release of S 45X is particularly significant for our Group. By providing essential financial support for our US PGM (platinum group metals) operations [in Montana] as we focus on reducing costs and increasing productivity to stabilise our US PGM operations we will be able to secure the long-term viability of these strategic assets.”
Subscribe to Australian Mining and receive the latest news on product announcements, industry developments, commodities and more.
