Argentina Expects to Get Exemption from U.S. IRA Tax Credit Rules
- May 24, 2023
- Posted by: Quatro Strategies
- Category: Legislation
Argentina, which has been lobbying to receive an exemption from the electric vehicle (EV) tax credit rules in Biden administration’s Inflation Reduction Act (IRA), says its lithium could soon gain access to the U.S. market. The IRA sets out tax credits for EVs that have a portion of their battery metals sourced in the US or a free-trade-agreement (FTA) partner. Australia and Chile, the top two lithium producers, have FTAs with the U.S., while Argentina doesn’t.
Officials in Buenos Aires have been working on the issue with U.S. diplomats and believe they are close to getting Argentina an exemption, Avila, the federal mining undersecretary, and Mignacco, president of Argentina’s mining industry chamber (Caem), said Tuesday.
Argentina’s push comes amid a global competition for key EV minerals between the US and China.
The country’s only two current producers, U.S.-based Livent and Australia’s Allkem, are set to merge to create the world’s third-biggest lithium company focused on supplying the U.S.
A third Argentine project is on the brink of starting production, but the Lithium Americas operation will supply China’s Ganfeng Lithium, as Beijing commits more broadly to helping Argentina develop a lithium processing industry.
That project, which will be separated from Lithium Americas’ U.S. assets, should come online next month, Mignacco said.
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