Critical Mineral and Extraction Tax Parity Act would expand incentives for domestic mining, processing, and production
WASHINGTON—U.S. Senators John Curtis (R-UT) and Steve Daines (R-MT) introduced the Critical Mineral and Extraction Tax Parity Act, legislation to strengthen America’s domestic critical mineral supply chains by expanding and improving the Advanced Manufacturing Production Tax Credit under Section 45X of the Internal Revenue Code.
“The United States should not have to depend on foreign adversaries for the minerals that power our economy, support our national defense, and underpin modern technology,” said Senator Curtis. “Utah and states across the West have the resources, workers, and expertise to produce more of these materials here at home. Our bill makes sure the tax code recognizes the full cost of American mineral production and gives domestic producers a fair opportunity to compete with heavily subsidized, artificially propped-up foreign supply chains.”
“There is no reason the United States should rely on other foreign nations for critical minerals that can be found right here at home, including in Montana. I’m proud to work with Senator Curtis to expand our critical mineral supply chain and ensure fairness in the tax code for American producers and businesses. It’s time to unleash America’s natural resources to power our economy and strengthen our national security,” said Senator Daines.
Background:
Critical minerals are essential inputs for energy infrastructure, advanced manufacturing, defense systems, agriculture, electronics, and other sectors of the U.S. economy. The Critical Mineral and Extraction Tax Parity Act updates Section 45X to better reflect the economics of domestically producing those minerals, including the extraction activities necessary before refining can occur. The legislation would add several strategically important minerals to the Section 45X credit, recognize qualifying costs associated with extracting ore, and eliminate the reduced credit rate currently applied to metallurgical coal.
The legislation would strengthen and expand the Advanced Manufacturing Production Tax Credit by:
- Expanding eligible critical minerals to include boron, copper, lead, potash, rhenium, silicon, silver, uranium, and phosphate;
- Ensuring parity for metallurgical coal by removing the current 2.5 percent credit limit, allowing producers to claim the same credit available to other eligible minerals; and
- Clarifying that mineral extraction is an eligible expense under the credit if the ore is extracted in the United States or if the ore is not of a type extracted in the U.S. at a commercial scale and not extracted in a foreign country of concern.
Section 45X is intended to encourage domestic production of critical components and materials essential to American manufacturing. By recognizing additional critical minerals and the costs required to extract the raw materials used to produce them, the bill would strengthen incentives to build more complete mineral supply chains in the United States and reduce reliance on foreign sources.
The full text of the bill is available here.
“To meet the nation’s surging energy demand, electric utilities need a domestic supply of energy infrastructure and equipment,” said Mike Squires, UAMPS Managing Director of Government Affairs (UAMPS). “Much of this equipment contains critical minerals like copper that Utah produces. UAMPS is grateful for Senator Curtis’ leadership on advancing legislation that would increase critical mining and processing capacity in the United States.”
“Adding phosphate to the list of eligible minerals under section 45X of the Internal Revenue Code will greatly help domestic phosphate producers like the Simplot Company and will incentivize future investment in phosphate mining and processing,” said Garrett Lofto, President and CEO, the Simplot Company. “We very much appreciate Senator John Curtis’ leadership on this legislation and his support of strengthening the domestic supply chain for critical minerals such as phosphate.”
“The Critical Mineral and Extraction Tax Parity Act brings federal tax policy in line with today’s mineral needs by reflecting the latest U.S. Geological Survey critical minerals list and recognizing the importance of domestic extraction and production,” said Lyndsey Wright, Women’s Mining Coalition Executive Director. “This commonsense legislation strengthens America’s mineral supply chains, supports a competitive domestic mining industry, and helps reduce our dependence on foreign sources for the resources our economy and national security rely on.”
“We applaud the introduction of the Critical Mineral and Extraction Tax Parity Act, an important step to strengthen America’s mineral security and competitiveness,” Said Rich Nolan, President and CEO, National Mining Association. “Extending the Advanced Manufacturing Tax Credit to include the Department of the Interior’s updated list of critical minerals, provides investors with meaningful incentives to expand domestic mining and production across the country. All of these minerals are indispensable to America’s manufacturing base, energy systems, economy and national defense, yet the United States remains dangerously dependent on foreign sources for far too many of them. America has the resources. What we need are policies that allow us to produce them and directly address the alarming gaps in our minerals supply chains.”
“The Uranium Producers of America (UPA) applauds Senator Curtis [and Senator Daines] for introducing the Senate companion of the Critical Mineral and Extraction Tax Parity Act” said Scott Melbye, President, UPA and Executive Vice President, Uranium Energy Corp. “This important legislation will strengthen domestic critical mineral production, including uranium. It will further reduce U.S. dependence on foreign adversaries for uranium supply chains. Including uranium and other critical minerals within the Section 45X Advanced Manufacturing Tax Credit will spur further investment in America uranium production, ensuring American energy security and national security as the world increasingly looks to nuclear energy to meet growing power demand. This legislation complements previous efforts by Congress and the Trump Administration to ensure a robust and reliable domestic nuclear fuel supply chain that UPA and its member companies are actively working to expand.”
“Minerals are crucial to the future of American energy dominance,” said Andrew Sandstrom, Executive Director of Unleash Utah. “By incentivizing domestic extraction, we are shifting production away from adversarial regimes with abysmal environmental and labor records. This will unlock jobs for our rural communities, secure our supply chains, and help lower costs. It’s time we stop importing our energy future from China and start building it ourselves.”
“America should lead the world in critical minerals production,” said Jeremy Harrell, CEO, ClearPath Action. “The Critical Mineral and Extraction Tax Parity Act will incentivize domestic production for all minerals on the USGS critical minerals list, strengthen supply chains and ensure America, not foreign adversaries, controls our energy and economic future.”
“As demand for critical minerals continues to grow, copper remains fundamental to America’s energy, manufacturing, infrastructure, and defense priorities,” said Nate Foster, Managing Director, Kennecott Utah Copper. “Recognizing copper processing under the 45X tax credit would encourage investment in domestic production, reinforce U.S. supply chains, support American workers, and enhance the refining and smelting capacity necessary for long-term competitiveness. At Rio Tinto Kennecott, we are proud to help provide the copper and other essential materials that underpin the nation’s economy and security.”