Tesla’s call for tax breaks for lithium is ‘on the table’: minister

afr.com:

Resources Minister Madeleine King says tax breaks for critical mineral projects and lithium processing are “on the table”, as the government seeks to compete with US and allied nations for international investment.

Tesla chairman Robyn Denholm warned that Australia risked losing out to the US, Europe and Asian trading partners unless it introduced tax breaks for battery grade lithium processing.

A production tax credit of “less than 10 per cent” would put Australia on the map as a global battery-grade lithium hydroxide processor, Ms Denholm told the Minerals Council’s annual conference in Canberra on Tuesday.

Resources Minister Madeleine King at the minerals conference in Canberra. Dion Georgoloulos

On Wednesday, Ms King said such tax breaks were a live policy option, citing the US Inflation Reduction Act as luring a staggering wave of investment via tax subsidies.

“We know how useful the production credits are proving through the Inflation Reduction Act in the US,” Ms King told the two-day conference of mining bosses.

“That’s proven to be, and will be, an extraordinary policy for the US driving, clean and green technology development, as well as critical minerals partnerships as well.

“So, it’s certainly on the table.”

With more than US$400 billion in subsidies and handouts, the IRA is the Biden administration’s attempt to spark a clean energy transition, re-industrialise the US economy and decouple from China via production tax credits.

Ms King indicated the government was still seeking clarity on which Australian projects would be eligible for the tax breaks under the IRA, which supposedly allows nations with US free-trade agreements to cash in.

“I can’t pretend to understand the legislative machinations of the US