Niocorp Developments Ltd (NB)

[Hetfield]

NioCorp Joins With Major Automotive Manufacturers, Mining Companies and Electric Vehicle Battery Companies to Urge Action by Biden Administration on Mining Tax Incentive

CENTENNIAL, Colo. – February 8, 2024 – NioCorp Developments Ltd. ("NioCorp" or the "Company") (NASDAQ:NB) (TSX:NB) joined with major automotive manufacturers, mining companies, and electric vehicle battery companies to urge the Biden Administration to allow a 10% tax credit to apply to both mineral extraction and mineral processing in the U.S.

In a joint letter this week to U.S. Treasury Secretary Janet Yellen, NioCorp and 45 other companies and associations, including Tesla, General Motors, and the Zero Emission Transportation Association, urged the Internal Revenue Service not to limit the Section 45X Advanced Manufacturing Product Tax Credit (the “45X Tax Credit”) only to the cost of processing critical minerals needed for electric vehicles and other clean energy technologies, but to extend the 45X Tax Credit to the cost of mining the minerals as well. The 45X Tax Credit was enacted with support from both political parties as part of the Inflation Reduction Act of 2022.

In the letter, NioCorp and other signatories explained their concerns as follows:

"Section 45X creates a new tax credit that provides $35 per kWh for each battery cell, $10 per kWh for each battery module, and covers 10 percent of the costs of production of the applicable critical materials, which will significantly drive down the costs of domestic clean energy manufacturing. Unlike other eligible components, applicable critical minerals are not subject to a credit phaseout after 2029, underscoring Congressional intent that the IRA incentivizes the onshoring of the critical minerals supply chain.

"If implemented thoughtfully, the 45X credit will ensure the success of current American industrial policy over the next decade by facilitating the deployment of domestically-produced clean energy technologies —particularly electric vehicles. However, the proposed guidance states that the only critical mineral production costs eligible to be counted toward the production tax credit are the downstream value-added activities that include chemical conversion and purification (i.e., processing). This concept would not provide a tax credit for the costs of domestic extraction of critical minerals, a key part of onshoring the supply chain.
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"Congress intended the 45X tax credit to work in tandem with the clean vehicle credit’s sourcing requirements to stimulate domestic production of critical minerals and reduce the United States’ reliance on imported minerals," the coalition wrote. "To stimulate greater security of our domestic critical mineral supply chains and unlock the intended impact of the statute, the undersigned organizations urge the Department of the Treasury and the IRS to consider that direct and indirect material costs and costs related to the domestic extraction of raw materials are value-added activities and should be eligible to claim the 45X credit.”
https://www.niocorp.com/wp-content/uploads/45X_Industry_Letter_to_Treasury-IRS_Feb-2024.pdf