To build a full rare earth supply chain, it’s sometimes not enough to just mine, extract, and process ores. Far away from project sites where heavy machinery dig deep into the earth, small tweaks to the tax code could align incentives and spur production to boost a domestic industry.
That’s the thinking anyway behind a bipartisan bill introduced in the US Congress last week, which would provide tax credits for the domestic production of permanent rare earth magnets.
The “Rare Earth Magnet Manufacturing Production Tax Credit Act,” put forward by Democratic representative Eric Swalwell and his Republican colleague Guy Reschenthaler, would give a tax credit of $20 per kilogram of rare earth magnet produced domestically in the US. The tax credit increases to $30 per kilogram if all component rare earth material is produced or recycled in the US.
Rare earths are a group of 17 metals with unique physical and chemical properties, making them indispensable to many high-tech applications that power the global economy. Permanent rare earth magnets, which are powerful magnets enhanced with rare earths, are important components of products like wind turbines, electric vehicle motors, smartphones, and missile systems.
A Toyota Prius, for example, contains about 55 pounds (24 kilos) of rare earths. China produces 87% of the world’s neodymium-iron-boron (NdFeB) permanent rare earth magnets, according to (pdf, link in Chinese) Chinese state-owned firm Guosen Securities.
For the rest of this article: https://qz.com/2047599/the-us-is-turning-to-tax-tools-to-rebuild-its-rare-earth-industry/