Good News & Bad News, page-43946

Some reading for a rainy day.
I was disappointed that we (the company) decided to consider a JV with Chinese Ganfeng rather than look to diversifying to other countries, particularly the USA.
This extract from Hot Copper 25 March
If the joint venture proceeds, the parties intend to own the project 50:50, but Ganfeng is open to selling down its stake, depending on potential benefits from the U.S. Inflation Reduction Act subsidy scheme that has U.S. sourcing requirements, the companies said.
To understand the last bit about “selling down its stake” one needs to refer to the IRA in reference to Critical Minerals. https://foreignpolicy.com/2022/09/16/inflation-reduction-act-critical-mineral-chains-congress-biden/#:~:text=Built%20within%20the%20IRA%20is,and%20renewable%20power%20production%20infrastructure.
An extract
the IRA’s EV tax credits come with important caveats—namely, they only apply if the materials used to construct the vehicle come from either the United States or nations the United States has free trade agreements with.

In brief, the USA wants to establish supply lines for critical minerals (including lithium) completely independent of China. While developing its own local lithium mines, which some (including Ken Brinsden) have said will take at least 6 years, the federal government has pragmatically acknowledged it must in the meantime continue “sleeping with the enemy” to obtain lithium based products. However, it has imposed a reducing benefit for tax benefits on EV battery components with a non-North American or Free Trade Agreement partner content.https://www.consumerreports.org/cars/hybrids-evs/electric-cars-plug-in-hybrids-that-qualify-for-tax-credits-a7820795671/
Extracts
To qualify for a full tax credit, at least 50 percent of a vehicle’s battery components must be produced or assembled in North America. In addition, at least 40 percent of critical minerals used in the battery must be extracted or processed in the U.S. or in a country that’s a U.S. free-trade agreement partner, or they must have been made from materials recycled in North America. The new rules will become stricter over time, with requirements increasing by 10 percent each year through 2027. By then, 90 percent of battery components and 80 percent of critical minerals will have to meet the guidelines. (my embolden) A vehicle must be assembled in North America, including Canada and Mexico, to qualify for any tax credit. This eliminates credits for vehicles assembled elsewhere, including the BMW i4, Hyundai Ioniq 5, Kia EV6, and Toyota bZ4X. (This requirement also may not apply to some leased vehicles.) It doesn’t matter if a vehicle comes from an Asian or European brand, only where it’s assembled. '

The USA and Canada have only one lithium mine each, so despite the extra freight involved I think we should stop pretending the CCP is our friend and direct some of our product to our strategic allies.
Cantankerous James