CENTENNIAL, CO - NioCorp Developments Ltd. (NASDAQ:NB)(TSX:NB) has united with a coalition of major automotive manufacturers, mining companies, and electric vehicle (EV) battery producers to petition for an expansion of the current U.S. tax credit system to incentivize mineral extraction, not just processing.
The group, including Tesla (NASDAQ:TSLA), General Motors (NYSE:GM), and the Zero Emission Transportation Association, has addressed a joint letter to U.S. Treasury Secretary Janet Yellen, advocating for the 10% tax credit under Section 45X of the Inflation Reduction Act of 2022 to also cover the costs of mining critical minerals.
The 45X Advanced Manufacturing Product Tax Credit currently endorses $35 per kWh for battery cells, $10 per kWh for modules, and 10% of production costs for critical materials, which are vital for EVs and other clean energy technologies. The signatories are urging that the credit should be extended to the domestic extraction of these minerals to bolster the U.S. supply chain and reduce dependence on foreign sources.
NioCorp's Executive Chairman and CEO, Mark A. Smith, emphasized the importance of mining in America to maintain a robust domestic supply chain and create high-skill jobs. He stated that without domestic mining, the supply chains could quickly dissolve due to foreign governments' actions that could undermine America's global leadership and weaken national defense.
The letter's signatories represent a broad industry spectrum, including the Alaska Miners Association, American Critical Minerals Association, and companies like Rio Tinto (NYSE:RIO) and Sibanye Stillwater (NYSE:SBSW). They argue that the 45X tax credit is instrumental for the success of American industrial policy over the next decade and is crucial for deploying domestically-produced clean energy technologies, particularly EVs.
NioCorp is developing the Elk Creek Critical Minerals Project in Southeast Nebraska, aiming to produce niobium, scandium, and titanium, and evaluating the potential to produce several rare earths. The company believes that the proposed expansion of the tax credit to include mineral extraction costs is vital for the project's success and the country's strategic interests.
The information in this article is based on a press release statement from NioCorp Developments Ltd.
InvestingPro Insights
As NioCorp Developments Ltd. (NASDAQ:NB)(TSX:NB) works alongside industry giants to advocate for policy changes that could significantly impact the electric vehicle supply chain, financial metrics and analyst insights provide a deeper understanding of the company's current market position. According to real-time data from InvestingPro, NioCorp has been navigating a challenging financial landscape:
- The company's Price/Earnings (P/E) Ratio stands at -2.59 as of the last twelve months ending Q1 2024, reflecting market skepticism about future earnings.
- A Price/Book (P/B) Ratio of -14.56 suggests that the market values the company significantly lower than its book value, which can be indicative of investor concerns about asset valuations or profitability.
- NioCorp has reported an Operating Income of -38.77 million USD over the same period, underscoring the financial hurdles it faces.
InvestingPro Tips highlight several key points that investors should consider:
- NioCorp operates with a moderate level of debt, which could affect its ability to invest in new projects or weather economic downturns.
- The company is trading near its 52-week low, which could represent a potential entry point for investors who believe in the long-term prospects of the company and the industry it serves.
While InvestingPro provides these insights, subscribers have access to additional tips that could further inform investment decisions. There are 6 more InvestingPro Tips available for NioCorp, which can be accessed through a subscription. Interested readers can use the coupon code SFY24 to get an additional 10% off a 2-year InvestingPro+ subscription, or SFY241 to get an additional 10% off a 1-year InvestingPro+ subscription.
These financial insights underscore the importance of the company's strategic moves, such as the push for policy support in mineral extraction, which could be pivotal for NioCorp's future profitability and operational stability.
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