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To incentivize US rare earth and battery metal production Metal Tech News – April 21, 2021
Texas Congressmen Lance Gooden and Vicente Gonzalez have introduced legislation aimed at reducing U.S. dependence on China for rare earth elements and other critical minerals.
A pair of Texas congressmen, Republican Lance Gooden and Democrat Vicente Gonzalez have introduced the Reclaiming American Rare Earths Act, bipartisan legislation aimed at reducing America's dependence on China for rare earth elements and other minerals critical to the United States.
The U.S. depends on foreign countries for more than 50% of its supply of 28 of the 35 minerals deemed critical to America's economic and national security, including 100% import-reliant for 14 of them. China is the leading supplier of 22 of the minerals for which the U.S. is net import reliant.
"Our capacity to manufacture essential technology for our national defense and economic prosperity will remain in danger as long as we remain dependent on China," said Gooden on April 20. "We must start producing these critical minerals here at home and producing in America first."
The COVID-19 disruptions to global supply chains have accentuated the need for the U.S. to be more self-reliant for its goods. China dominates the supply of many of the critical minerals that lie at the beginning of these supply chains.
"This pandemic has confirmed that we must uncouple our supply chains and our reliance on China. We have the technological capacity and workforce capable to develop a reliable domestic supply of critical minerals and rare earth elements," said Gonzalez. "We must eliminate China's strategic advantage which is already harming our national security and most importantly, our way of life."
The Texas Congressmen's RARE Act would establish tax incentives for the domestic production of rare earths and battery metals essential to U.S. technology, energy, transportation, infrastructure, healthcare, and defense sectors.
The minerals to be incentivized under the RARE Act include all 17 rare earth elements plus five battery minerals and metals – cobalt, graphite, lithium, manganese, and vanadium
Under the legislation, companies that are mining, reclaiming, or recycling these minerals and metals in the United States would be able to treat expenditures as operating costs that are fully deductible from their taxes.
The bill also offers a new tax deduction for 200% of the cost of purchasing or acquiring these critical minerals and metals that are extracted from deposits in the U.S.
In addition to tax incentives, the RARE Act would require the Department of the Interior to establish a pilot grant program for the domestic development of critical minerals and metals. The grant amount would be capped at $10 million, and the Interior must give priority to projects determined to be economically viable over the long term. In addition, at least 30% of the grant funds must be allotted to the secondary recovery of critical minerals and metals.
The Texas congressmen, which come from opposite sides of the aisle, said reshoring America's critical minerals supply should not be a partisan issue – both President Donald Trump and President Joe Biden have recognized the need for our government to encourage domestic production of these basic building blocks of modern technologies.
"I am proud to support the RARE Act, critical bipartisan legislation that will jump start domestic critical mineral and rare earth element production," said Gonzalez.
With more than 16 years of covering mining, Shane is renowned for his insights and and in-depth analysis of mining, mineral exploration and technology metals.
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