New tax credit bill seeks to challenge China’s dominance in the processing of critical minerals
A bipartisan bill set to be introduced in Congress this week would offer a tax credit for establishing rare-earth magnet production in the U.S., a crucial component for the clean-energy transition. MP Materials efforts to build a local supply chain demonstrate the challenge for American producers.
The bill, to be introduced by Rep. Guy Reschenthaler (R., Pa.) and Rep. Eric Swalwell (D., Calif.), includes a $20-a-kilogram credit for U.S.-made magnets, while manufacturers sourcing 90% of their component parts from U.S. producers could be entitled to a $30-a-kilogram credit, according to a draft seen by The Wall Street Journal. The credit is planned to be phased out by Dec. 31, 2035.
The bill, known as the Rare Earth Magnet Manufacturing Production Tax Credit Act of 2023, is the latest in a list of incentives to encourage rare-earth production as more attention is being focused on the metals and where they come from.
Rare earths such as neodymium, dysprosium and terbium are used in permanent magnets that are needed to help drive motors in electric vehicles, offshore wind turbines and increasingly within robotics.
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