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N.C. lithium suppliers say climate law will help their businesses

032822 Albemarle Kings Mt aerial 2.JPG
Albemarle Corp.
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Albemarle Corp. is considering draining an old pit mine (water at left) in Kings Mountain to resume mining for lithium. The site is off I-85 about 35 miles west of Charlotte.

The federal climate and health care law enacted last week has provisions aimed at boosting the U.S. electric vehicle industry. North Carolina lithium mining companies say it will help their business of supplying electric vehicle makers.

The law could help lithium miners in two ways: First, tax credits that stimulate sales of U.S.-made electric vehicles will in turn boost demand for U.S.-sourced batteries and the elements that go into them, such as lithium. And second, the law offers a 10% production tax credit for mining, processing and battery manufacturing in the United States.

Ellen Lenny-Pessagno, global vice president of government and community affairs with Charlotte-based mining company Albemarle Corp., said the tax credit will make U.S. suppliers more competitive.

"It's looking to reduce the cost of production in the United States. One of the challenges that the industry faces is that it is more costly to operate in the United States, than in some lower cost markets," Lenny-Pessagno said.

Markets like China, which supplies more than half the planet's refined lithium.

The area west of Charlotte is rich with lithium. It once was a major global supplier of the element. Even before the law, companies had been planning to restart mining here.

The new law is a shot in the arm for Albemarle's plans to revive a former lithium mine in Kings Mountain, 30 miles west of Charlotte. The company has held community meetings to share its plans, but hasn't set a date for reopening the mine.

Lenny-Pessagno said there's a lot of work ahead as U.S. companies try to take advantage of the tax credits and ramp up production.

"The question is, how quickly can any of this get done?" she asked.

The law actually limits the number of electric vehicles for sale in the U.S. that qualify for the consumer tax credit, because it requires cars to be assembled here with more local content. So EV makers will be scrambling for suppliers that meet the law's requirement.

The Alliance of Automotive Innovation estimates that about 50 of the 72 electric vehicles available in the US today do not qualify for the credit because they aren't assembled in the U.S. or don't meet content requirements.

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David Boraks
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WFAE
A contractor for Piedmont Lithium drilled for core samples as the company tested for lithium deposits in northern Gaston County in 2019.

Meanwhile, the law also could help the Belmont-based startup Piedmont Lithium. It's planning a new lithium mine and processing facility in northern Gaston County, about 35 miles west of Charlotte. And it soon will announce another refining plant in the Southeast, said CEO Keith Phillips.

"If you have a lithium mining or chemical project in the United States, and you pay taxes, which we hope to do one day, you would be eligible for a tax credit, as I understand it, up to 10% of your actual production costs. And, you know, that's very significant," Phillips said.

He thinks more benefits will become apparent as details of the law come out.

"The more we read the law and the better we understand it the more excited we are," Phillips said.

Phillips said the law is expected to drive demand not just for cars, but also for heavy-duty vehicles. And that demand will only help companies like Piedmont.

"The car companies, bus companies, truck companies will be very aggressively seeking domestic sources of material, including Canadian, Australian and other countries with free trade agreements with the U.S. So that's helpful … for lithium consumption and demand," he said.

Both companies say they're waiting for the Treasury Department to issue specifics on the tax credit.

Piedmont Lithium is awaiting approval for a state mining permit for its proposed mine near Cherryville. And that plan also still needs Gaston County zoning approval. Phillips said the company has not hit its earlier goals for opening because the process has been more complicated than expected.

"By having a mining project and chemical project on one site, the permitting is more complex, and it's going to take longer," he said.

"We're still optimistic we'll be fully permitted at some point in 2023. We're contemplating construction beginning in 2024, and first production in 2026. So we're very excited about that. We feel good about that timeline," Phillips said.

Besides Albemarle and Piedmont Lithium, Pennsylvania-based Livent Corp. also has a major presence in North Carolina, with offices in Charlotte and a lithium processing plant in Bessemer City, in Gaston County.

Publicly traded shares of the three companies have risen over the past three years as projections for lithium demand have risen.

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David Boraks is a veteran journalist who covers climate change for WFAE. See more at www.wfae.org/climate-news. He also has covered housing and homelessness, energy and the environment, transportation and business.