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Urges House to approve tax incentives for needed industry Metal Tech News – September 1, 2021
The enormous Round Top rare earths deposit in Texas is at the front end of a rare earth mines-to-magnets supply chain that USA Rare Earth and Texas Mineral Resources are working to establish in the United States.
Roughly 93% of electric vehicle motors take advantage of the performance benefits offered by powerful rare earth magnets.
The National Mining Association and a group of 16 companies working to establish a complete rare earths mines-to-magnets supply chain in the United States are urging Congress to approve legislation that would provide tax incentives for the domestic manufacturing of REE magnets.
Earlier this month, Reps. Eric Swalwell (D-California) and Guy Reschenthaler (R-Pennsylvania) introduced HR 5033, a bipartisan bill to help stimulate domestic production of rare earth magnets as part of a national initiative to strengthen the economy and combat climate change.
Rare earth permanent magnets are used in a wide variety of modern applications such as computer hard drives, smartphones, and MRIs. However, it is low-carbon energy and transportation that is driving enormous growth in demand. For example, roughly 93% of all electric vehicles utilize these powerful magnets in their drivetrains.
Many more of these magnets will be needed to achieve White House aspirations for EV adoption in the U.S.
President Joe Biden recently signed an executive order that sets the goal of zero-emissions vehicles accounting for 50% of all automobiles sold in the U.S. by 2030.
Despite their increasing importance to the automotive, high-tech, and energy sectors, none of these powerful magnets are currently produced in the U.S.
"(I)f America is to be a global leader on electric vehicles, we can't let other nations like China control production of vital materials and components," said Swalwell. "By encouraging U.S. production of rare earth magnets, we're shoring up our economy and also doing more to combat climate change."
To help establish a domestic rare earth magnet supply, Swalwell and Reschenthaler, which co-chair the Congressional Critical Materials Caucus, have introduced The Rare Earth Magnet Manufacturing Production Tax Credit Act.
This bill would create a $20 per kilogram production tax credit for magnets that are manufactured in the U.S., or a $30/kg for domestically manufactured magnets that utilize rare earth materials produced and recycled wholly within America. To be eligible, the rare earth magnets may not include any component material produced in non-allied foreign nations, such as China, Iran, North Korea, and Russia.
"COVID-19 showed us the perils of relying on Chinese supply chains," said Reschenthaler. "This bill encourages the production of rare earth elements and manufacturing of rare earth magnets here in the United States and will spur new economic opportunities for American workers while enhancing national security and supporting American energy independence."
In an Aug. 30 letter, NMA and a coalition of 16 companies along the entire rare earth magnet supply chain urged Democrat and Republican leaders of the House to include the provisions of HR 5033 to the $1 trillion infrastructure bill passed by the Senate earlier this month.
In this letter, the alliance said the incentives in the bill would help the nascent rare earth magnets sector in America weather attempts by countries like China "to weaponize non-market subsidies, loose environmental regulations, and substandard labor practices to further consolidate control."
"For decades, U.S. policymakers, our industry, and our customers have longed for a domestic supply chain free from foreign reliance that upholds American values and standards," the rare earth magnet coalition penned in the letter. "The consequences of inaction are stark; China could continue to escalate its aggressive tactics to eliminate progress made by our burgeoning industry."
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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