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1) The US introduced new tax credit riles for manufacturers involved in the energy transition, outlining a clear divide between benefits for miners and processors. Companies mining critical minerals like lithium, nickel, cobalt, and others listed by the US will not receive a 10% production tax credit for acquiring these materials, according to the Treasury Department guidance under the Biden administration's Inflation Reduction Act. The credit exclusion also extends to the procurement of batteries for raw material recycling, affecting firms like Redwood Materials and Li-Cycle Holdings. However, manufacturers of clean-energy products, such as Alcoa and Century Aluminum, engaged in processes coverting minerals into usable forms, like alumina from bauxite for aluminum products, stand to benefit from the 45X tax credit for production costs encompassing labor and electricity expenses. Analysts at TD Cowen expressed concerns, highlighting the guidance's narrow definition of elgible production costs, limiting it to expenses directly linked to mineral processing. The National Mining Association, representing over 250 companies, criticized the measures, stating they fail to incentivize secure mineral supply chains and deeming the guidance a misinterpretation of the law that exacerbates challenges posed by China's dominance in this sector.
2) Australia expanded its roster of critical minerals crucial for energy transition and national security, adding flourine, molybdenum, arsenic, selenium, and tellurium while removing helium from the list. Minister for Resources Madeleine King emphasized the significance of these minerals in modern technologies, economies, and national security. Additionally, a new strategic materials list was introduced, encompassing copper, nickel, aluminum, phosphorus, tin and zinc. While pivotal for the energy shift, these commodities possess stable industries and aren't considered susceptible to supply chain disruptions. The aim of these lists, as per Minister King, is to focus government attention on commodities vital for job creation, national security, and economic strength. Australia and the US are intesifying collaboration on critical minerals and infrastructure initiatives, part of a broader strategy aimed at counteracting Chinese influence in the Indo-Pacific region. However, excluding nickel and copper from the critical minerals list drew criticism from the Association of Mining and Exploration Companies, labeling it a missed opportunity that hinders major funding eligibility for projects associated with those minerals. The association highlighted the projected surge in demand for nickel by 2050, nearly 4 times higher than current production levels. Australia's move signifies a strategic effort to fortify its mineral resources, ensuring a sustainable supply chain crucial for technological advancements and national security, albeit drawing differing opinions regarding the inclusion criteria for certain minerals.