The Chilean government’s announcement that products made with Chilean-mined lithium will qualify for US tax benefits under the Inflation Reduction Act.
The Chilean government announced on July 11th, that products made with lithium mined in Chile, used in electric vehicle batteries, will be eligible for US tax benefits.
As the world’s largest copper producer and second-largest lithium producer, Chile will qualify for the tax breaks provided by the US Inflation Reduction Act (IRA), which includes subsidies for electric vehicles based on the sourcing of their battery metals.
Due to the free trade agreement between Chile and the US, both countries have clarified that Chile is eligible for these tax breaks, according to the Chilean economy ministry.
The Biden administration has proposed stringent regulations on firms controlled by China, Russia, North Korea, and Iran. In Chile, the local firm SQM’s second largest shareholder is Tianqi Lithium, a major Chinese player in the lithium market.
The only other active lithium producer in Chile is the US-based Albemarle.
The IRA tax incentives will encourage the export of Chilean raw lithium materials,as well as more expensive cathode material and lithode byproducts, the economy ministry stated.
Additionally, Chile has recently launched initiatives to provide preferential pricing from miners to those who use lithium as a raw material.
