U.S. Tax – The Andean country’s government announced on Thursday that products made using lithium mined in Chile, which is used in electric vehicle batteries, will be eligible for tax breaks in the United States.
Chile, the world’s largest copper producer and second-largest lithium producer, will be eligible for tax benefits outlined in the United States’ Inflation Reduction Act (IRA) which includes subsidies for electric vehicles depending on battery metal sourcing.
The IRA demands that a specific percentage of the key metals in the battery come from the United States or a country with which it has a free trade agreement.
Chile’s free trade deal with the United States “made it explicit” that the country was entitled for the tax benefits, according to the economy ministry.
President Joe Biden suggested on U.S. Tax
The government of US President Joe Biden suggested a strict threshold for enterprises controlled by China, Russia, North Korea, and Iran.
Tianqi Lithium, a Chinese company with a substantial stake in the lithium industry is the second-largest shareholder in Chilean enterprise SQM.
SQM is now finalizing the specifics of a joint venture with Chilean state-run copper miner Codelco as part of a government mandate to strengthen state control over the lithium business.
Albemarle, based in the United States, is Chile’s only other active producer of white metal.
The IRA tax reductions will encourage Chile to export raw lithium minerals, as well as more expensive cathode materials and lithode byproducts, according to the economy ministry.
The South American country has also lately initiated steps to ensure that firms that utilize lithium as a raw material get preferential pricing from miners.
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