Analysis-Trump's tax-cut bill could hold back US critical minerals projects
Westwin might not be able to service its debt without the tax credit, Long said, noting the company's loans were modeled using the expectation it would be permanent. Last month, Long wrote a letter asking the Senate to keep the credit. It was co-signed by 30 industry executives.
Any changes the Senate makes to the bill must be reconciled with the House version before being sent to Trump. Several House members have admitted they did not read the entire bill before voting for it, including Congresswoman Marjorie Taylor Green, a Georgia Republican, and Congressman Mike Flood, a Nebraska Republican.
House Democrats unanimously voted against the bill but their criticism has focused on tax cuts they say will widen the deficit while requiring cuts in health care, food assistance, education, scientific research and other programs.
"There's so many issues right now under consideration in Congress and this one isn't breaking through, but it will certainly break through when we have a shortage of minerals in five years," said Jeff Green, a critical minerals industry consultant.
Senator John Hickenlooper, a Colorado Democrat who voted for the IRA in 2022, said in a statement to Reuters that cutting the credit would "kill jobs ... just to fund tax breaks for the ultra-weathy" and would be a "bad deal" for the country.
Trump, who has issued several executive orders aimed at boosting U.S. minerals production, has not commented publicly on the 45x debate. The White House did not respond to requests for comment.
"The tax credit just adds a phenomenal bump to a project's economics and gives us advantages that China already gives its own companies," said Alex Grant, CEO of magnesium processing startup Magrathea, who signed the letter. China controls most of the world's production of the metal, used in alloys for steel and aluminum.
Abigail Hunter, executive director of SAFE's Center for Critical Minerals Strategy, described the tax credit as the "only tool currently available to support industry exposed to market manipulation."
The House version also removes any remaining IRA funding for the U.S. Department of Energy's Loan Programs Office (LPO), which under Biden awarded billions of dollars in loans to Nevada lithium projects from ioneer and Lithium Americas. Potential for the LPO's closure led miners to rush to finalize loans last year, as Reuters reported in August.
Republican senators this week said they were in discussions about how to extend some green energy tax credits, especially for businesses with large capital investments. No firm commitments have been made.
For Mahesh Konduru, CEO of minerals processing startup Momentum Technologies, the credit is one way for Washington to show industry support.
"We need to have the appropriate tools to build, nurture and grow that supply chain inside the United States," he said.
(Reporting by Ernest Scheyder; additional reporting by Bo Erickson; editing by Veronica Brown and David Gregorio)
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