Eye on Lithium: US Inflation Reduction Act for lithium supply chain has flaws, Benchmark says

BMI says Inflation Reduction Act could help localise US lithium supply chain, but there are practical issues around implementation
Midas Minerals flags 3.6% lithium at Newington project in WA
Mapping and sampling at Firetail Resources’ Yalgoo project confirms lithium-bearing pegmatites

All your ASX lithium news for Monday, August 8.

The US Inflation Reduction Act promises $369 billion for climate and clean energy policies, but also sets an ambitious target to extract and process key battery minerals locally.

Benchmark Minerals Intelligence says it also zeroes in on the lithium-ion battery to EV supply chain with tax incentives and efforts to drive localisation, including an extension of the $7,500 tax credit relief for new electric vehicles beyond the current 200,000 vehicle cap.

However, it stipulates they have to be built with North America or trade agreement critical minerals, including lithium, cobalt, graphite, nickel and manganese.

The #InflationReductionAct is a big step forward for the EV battery supply chain in the USA by @EnergyDems @Sen_JoeManchin @SenSchumer

10% tax breaks across each part of the supply chain – mine, refining, chemicals – remains stand out.

But it’s not perfect esp $7,500 credit…

— Simon Moores (@sdmoores) August 4, 2022

“The bill says not less than two-fifths of the critical minerals used in electric vehicle batteries should be extracted and processed locally in the US or with a free trade agreement (FTA) partner, or recycled in North America,” Benchmark says.

“It includes provisions to ramp up this requirement to 80% in 2026.”

And to be eligible, batteries have to contain a level of critical minerals extracted or processed in any country the US has a free trade agreement with or recycled in North America – such as Australia, Canada, Chile, Mexico.

10% tax break across the supply chain

The bill also includes a 10% Advanced Manufacturing production tax credit across the breadth of the lithium-ion supply chain, which would help ease the cost burdens facing battery manufacturers and automakers.

Plus, an investment tax credit is also included for the energy storage and production tax credit for battery cell manufacturing with a cost of $35 a kilowatt-hour.”

“The proposed bill does seem to be a step in the right direction,” Benchmark analyst Manish Dua says.

“At the heart of it, the intent is to localise the critical minerals supply chain and components that go into making lithium-ion batteries and electric vehicles generating local value addition, to create jobs and eventually to gain pace in the goal of working towards climate change mitigation efforts.”

There are issues, though

While the proposal is a major step forward for the US, BMI has flagged a fews issues around its practical application.

“Considering it takes seven years to build a mine and refining plant but only 24 months to build a battery plant, the best part of this decade is needed to establish an entirely new industry in the United States,” Benchmark Boss Simon Moores said.

“The presently proposed $7,500 credit for those EVs that do not contain any critical minerals from China or Russia will effectively be made redundant, considering the proposal ends in 2024 just when a domestic supply chain is beginning to gain momentum.

“It is almost impossible that any Fair Trade Alliance countries – of which Australia and Chile are the stand out – could fill China’s raw material gap for the USA’s EV demand between now and 2024.

“This is considering the basic lack of raw material supply in many markets and the fact that most future raw material has already been contracted and accounted for.”

“If the US wants the incentive to really work, it needs to extend this by 4 years to 2028 so the battery supply chain builds into the incentive,” he added.

Here’s how ASX lithium stocks were tracking today:

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Code	Company	Price	% Month	% Week	% Today	Market Cap
FRS	Forrestaniaresources	0.195	44%	30%	39%	$4,352,082.56
LRS	Latin Resources Ltd	0.097	35%	24%	29%	$145,937,557.20
QXR	Qx Resources Limited	0.041	41%	37%	24%	$28,358,956.59
BNR	Bulletin Res Ltd	0.135	8%	13%	23%	$32,185,021.00
AZL	Arizona Lithium Ltd	0.098	8%	27%	21%	$194,798,970.44
LRD	Lordresourceslimited	0.24	12%	4%	20%	$6,356,924.20
MMG	Monger Gold Ltd	0.285	39%	19%	19%	$9,609,600.00
WCN	White Cliff Min Ltd	0.013	8%	18%	18%	$7,189,636.98
RMX	Red Mount Min Ltd	0.007	17%	8%	17%	$9,854,183.15
RAS	Ragusa Minerals Ltd	0.098	15%	29%	17%	$10,561,837.10
SYA	Sayona Mining Ltd	0.2425	47%	24%	15%	$1,742,484,950.85
AS2	Askarimetalslimited	0.395	58%	46%	14%	$15,548,898.15
EVR	Ev Resources Ltd	0.033	18%	22%	14%	$26,853,538.06
MM1	Midasmineralsltd	0.21	0%	11%	14%	$10,569,376.34
LRV	Larvottoresources	0.255	19%	28%	13%	$9,344,812.50
DRE	Dreadnought Resources Ltd	0.085	81%	31%	13%	$228,077,516.33
CRR	Critical Resources	0.052	8%	11%	13%	$68,448,700.99
PNN	Power Minerals Ltd	0.57	30%	15%	13%	$31,066,016.83
FTL	Firetail Resources	0.265	8%	2%	13%	$14,518,887.50
EUR	European Lithium Ltd	0.099	60%	29%	13%	$122,584,586.70
RLC	Reedy Lagoon Corp.	0.018	0%	29%	13%	$8,918,830.59
OCN	Oceanalithiumlimited	0.5	45%	9%	11%	$15,086,250.00
EFE	Eastern Resources	0.031	29%	27%	11%	$27,844,225.67
LKE	Lake Resources	1.025	35%	27%	10%	$1,292,454,392.58
GSM	Golden State Mining	0.054	35%	20%	10%	$5,704,644.63
MQR	Marquee Resource Ltd	0.087	19%	23%	10%	$24,933,788.82
GW1	Greenwing Resources	0.275	22%	10%	10%	$30,811,837.25
LNR	Lanthanein Resources	0.023	21%	44%	10%	$17,594,336.97
ESS	Essential Metals Ltd	0.535	41%	9%	9%	$120,778,838.25
GL1	Globallith	1.705	41%	17%	9%	$249,156,261.92
MLS	Metals Australia	0.066	25%	10%	8%	$34,650,207.65
CHR	Charger Metals	0.545	51%	11%	8%	$16,453,422.68
LIT	Lithium Australia	0.084	35%	18%	8%	$80,761,927.35
PAM	Pan Asia Metals	0.42	-2%	17%	8%	$28,828,894.38
IMI	Infinitymining	0.14	4%	17%	8%	$7,475,000.00
LEL	Lithenergy	1.065	53%	9%	8%	$44,698,500.00
INF	Infinity Lithium	0.15	30%	7%	7%	$58,101,829.24
G88	Golden Mile Res Ltd	0.03	0%	15%	7%	$5,704,513.19
TYX	Tyranna Res Ltd	0.03	67%	15%	7%	$42,906,098.68
KAI	Kairos Minerals Ltd	0.032	52%	16%	7%	$58,862,804.73
LLL	Leolithiumlimited	0.48	0%	10%	7%	$443,995,610.40
ADV	Ardiden Ltd	0.0085	21%	0%	6%	$21,346,682.85
A8G	Australasian Metals	0.26	27%	4%	6%	$10,086,771.03
MXR	Maximus Resources	0.053	15%	8%	6%	$15,895,288.40
TKM	Trek Metals Ltd	0.074	30%	14%	6%	$21,742,710.50
EMH	European Metals Hldg	0.84	25%	28%	6%	$95,163,198.12
PGD	Peregrine Gold	0.775	115%	85%	5%	$28,140,933.98
NMT	Neometals Ltd	1.36	45%	23%	5%	$707,405,550.84
LTR	Liontown Resources	1.585	58%	20%	5%	$3,299,298,922.99
CXO	Core Lithium	1.3525	42%	17%	5%	$2,227,424,268.50
LPD	Lepidico Ltd	0.0305	13%	5%	5%	$188,707,974.46
AGY	Argosy Minerals Ltd	0.41	22%	3%	5%	$528,932,633.97
LPI	Lithium Pwr Int Ltd	0.635	37%	19%	5%	$211,232,633.04
MTM	Mtmongerresources	0.11	-4%	5%	5%	$3,938,553.47
INR	Ioneer Ltd	0.675	55%	21%	5%	$1,353,296,479.02
JRL	Jindalee Resources	2.74	-6%	13%	5%	$150,332,890.92
PLL	Piedmont Lithium Inc	0.69	29%	12%	5%	$348,196,728.00
VUL	Vulcan Energy	8.32	43%	7%	5%	$1,140,948,995.96
STM	Sunstone Metals Ltd	0.047	2%	-6%	4%	$116,840,088.86
KTA	Krakatoa Resources	0.051	-6%	6%	4%	$16,890,785.93
WR1	Winsome Resources	0.265	26%	47%	4%	$34,454,068.47
PSC	Prospect Res Ltd	0.135	183%	13%	4%	$60,093,730.06
ASN	Anson Resources Ltd	0.14	33%	8%	4%	$138,768,165.23
AM7	Arcadia Minerals	0.14	-13%	0%	4%	$6,304,215.42
AML	Aeon Metals Ltd.	0.029	16%	4%	4%	$30,616,061.64
RDT	Red Dirt Metals Ltd	0.455	12%	17%	3%	$134,003,947.44
NVA	Nova Minerals Ltd	0.92	21%	5%	3%	$160,380,033.65
AUN	Aurumin	0.155	41%	-6%	3%	$16,383,487.80
IGO	IGO Limited	11.925	20%	8%	3%	$8,776,733,952.67
GT1	Greentechnology	0.72	20%	7%	3%	$128,988,750.10
PLS	Pilbara Min Ltd	2.945	30%	6%	3%	$8,543,554,862.08
DAF	Discovery Alaska Ltd	0.04	-17%	-13%	3%	$8,745,153.22
RIO	Rio Tinto Limited	99.36	-1%	2%	2%	$36,282,672,756.36
AKE	Allkem Limited	11.94	19%	6%	1%	$7,517,988,833.94
IR1	Irismetals	0.435	67%	16%	1%	$25,638,750.00
MIN	Mineral Resources.	57.88	27%	8%	0%	$10,918,965,401.65
1MC	Morella Corporation	0.018	6%	0%	0%	$101,271,851.75
AVZ	AVZ Minerals Ltd	0.78	0%	0%	0%	$2,752,409,203.44
TKL	Traka Resources	0.007	17%	0%	0%	$4,821,421.93
BMM	Balkanminingandmin	0.2	11%	0%	0%	$6,550,000.00
ARN	Aldoro Resources	0.2	33%	0%	0%	$19,917,463.40
AAJ	Aruma Resources Ltd	0.068	-1%	1%	0%	$10,673,382.20
AX8	Accelerate Resources	0.036	24%	3%	0%	$9,736,520.36
BYH	Bryah Resources Ltd	0.031	11%	3%	0%	$7,012,422.43
EMS	Eastern Metals	0.14	-7%	-7%	0%	$5,411,875.00
SHH	Shree Minerals Ltd	0.008	0%	-11%	0%	$9,907,895.14
TSC	Twenty Seven Co. Ltd	0.003	50%	0%	0%	$7,982,441.72
WML	Woomera Mining Ltd	0.016	-11%	0%	0%	$10,989,329.06
SCN	Scorpion Minerals	0.065	-11%	0%	0%	$21,569,027.48
ENT	Enterprise Metals	0.01	0%	-9%	0%	$6,529,806.88
VKA	Viking Mines Ltd	0.007	0%	0%	0%	$7,176,809.02
IPT	Impact Minerals	0.008	0%	-11%	0%	$19,850,964.45
SRI	Sipa Resources Ltd	0.045	22%	18%	0%	$9,226,116.14
RGL	Riversgold	0.03	-3%	11%	0%	$22,691,279.97
ZNC	Zenith Minerals Ltd	0.3	15%	-9%	0%	$103,428,683.70
EPM	Eclipse Metals	0.024	33%	14%	0%	$46,107,033.91
AOU	Auroch Minerals Ltd	0.061	2%	2%	0%	$22,551,809.74
XTC	Xantippe Res Ltd	0.008	0%	0%	0%	$64,107,788.51
WMC	Wiluna Mining Corp	0.205	-11%	0%	0%	$74,238,030.68
DAL	Dalaroometalsltd	0.11	12%	0%	0%	$3,286,250.00
GLN	Galan Lithium Ltd	1.34	26%	13%	-1%	$410,939,138.70
M2R	Miramar	0.099	10%	-1%	-1%	$6,418,666.30
CAI	Calidus Resources	0.76	15%	6%	-1%	$314,029,837.66
MNS	Magnis Energy Tech	0.365	16%	12%	-1%	$359,022,648.71
WES	Wesfarmers Limited	46.93	8%	1%	-2%	$54,084,179,543.40
MRR	Minrex Resources Ltd	0.058	57%	12%	-2%	$62,548,670.70
TUL	Tulla Resources	0.53	-5%	-5%	-2%	$86,517,110.88
CZL	Cons Zinc Ltd	0.024	26%	26%	-2%	$9,490,266.42
RAG	Ragnar Metals Ltd	0.041	8%	-2%	-2%	$15,925,765.34
TMB	Tambourahmetals	0.17	21%	-6%	-3%	$7,208,704.65
ZEO	Zeotech Limited	0.06	22%	-8%	-3%	$94,544,759.14
QPM	Queensland Pacific	0.145	16%	0%	-3%	$234,541,969.65
TON	Triton Min Ltd	0.028	56%	0%	-3%	$36,504,741.13
TEM	Tempest Minerals	0.045	-49%	13%	-4%	$23,724,010.27
MMC	Mitremining	0.11	-15%	-8%	-4%	$3,114,786.50
KZR	Kalamazoo Resources	0.22	16%	-2%	-4%	$33,394,706.02
WC8	Wildcat Resources	0.022	-15%	-8%	-4%	$14,841,272.72
DTM	Dart Mining NL	0.074	40%	1%	-5%	$10,550,292.48
AZI	Altamin Limited	0.085	-11%	-11%	-6%	$35,254,507.68
SRZ	Stellar Resources	0.016	-6%	0%	-6%	$14,268,144.64
ALY	Alchemy Resource Ltd	0.015	7%	15%	-6%	$15,249,184.91
KGD	Kula Gold Limited	0.027	-7%	-4%	-7%	$6,240,093.33
LIS	Lisenergylimited	0.715	43%	-5%	-7%	$127,753,923.99
VMC	Venus Metals Cor Ltd	0.175	3%	0%	-8%	$30,414,949.77
AOA	Ausmon Resorces	0.005	-17%	-17%	-9%	$4,715,091.39
FG1	Flynngold	0.087	-42%	-7%	-9%	$6,149,860.80
THR	Thor Mining PLC	0.009	-10%	-10%	-10%	$10,689,009.73
NWM	Norwest Minerals	0.04	43%	-13%	-11%	$8,127,332.42
LSR	Lodestar Minerals	0.007	-13%	8%	-13%	$13,907,498.78
CY5	Cygnus Gold Limited	0.195	30%	-3%	-15%	$27,136,622.45
AVW	Avira Resources Ltd	0.003	-14%	0%	-25%	$8,475,160.00

A solid 75 stocks were in the green, 25 were flat and 31 were red.

Who has news out today?

MIDAS MINERALS (ASX:MM1)

A sample from a newly discovered pegmatite at the company’s Newington project in WA have returned up to 3.6% lithium, 0.5% caesium, 335ppm tantalum, 208ppm tin and 1.6% rubidium.

And a sample from a pegmatite sub-crop 460m south returned 1.3% lithium, 171ppm tin and 0.5% rubidium.

Midas is ramping up mapping and sampling, with hundreds of pegmatite outcrops identified across the project area and RC drilling of initial Kawana East targets expected to commence this month.

FIRETAIL RESOURCES (ASX:FTL)

The company says surface mapping and geochemical soil sampling have confirmed a fertile system for lithium-bearing pegmatites at its Yalgoo project in WA.

The mapping and rockchip sampling returned results up to 1.35% lithium, 732ppm caesium and 61ppm tantalum.

Plus, the geochemical signature suggests there’s potential for further lithium-caesium-tantalum (LCT) bearing pegmatites in close proximity to the results.

Assays pending for 660 soil samples and 216 rock chip samples, with geochemical analysis to be undertaken once multi-element results received.

The company is planning its maiden RC drilling campaign in mid-to-late September.

EASTERN RESOURCES (ASX:EFE)

Soil samples at the East Curlew of the Trigg Hill project have returned up to 517ppm lithium, 95ppm tantalum and 922ppm tin.

“We are very pleased with the results from this initial soil sampling program at Trigg Hill. The East Curlew LCT pegmatite swarm appears to be much larger than originally anticipated with strong geochemistry over a large area,” executive director Myles Fang said.

“The proposed initial drill program will provide information on pegmatite density, orientation and mineralogy.”

The 2,000m RC drilling program and additional mapping programs to expand on the initial soil program are planned in the coming months.

GREEN TECHNOLOGY METALS (ASX:GT1)

The company says all exploration agreements and permits have been approved and site activities at the Root Project have commenced in preparation for upcoming drilling – alongside drilling of GT1’s flagship Seymour project.

“In 2016, Ardiden completed a short drill campaign targeting the McCombe pegmatites on the western side of Root. Returned intercepts confirmed high lithium grades and mineralised continuity down-dip, including 67m @ 1.75 Li2O,” CEO Luke Cox said.

”The focus of our initial 24,000m drilling program at Root is twofold: rapid delineation of an initial Mineral Resource estimate plus stepping out from the known pegmatites to test new, high prospectivity targets.”

OCEANA LITHIUM (ASX:OCN)

Exploration field work has kicked off at the company’s lithium projects in Brazil and Australia, just a month after listing.

At its flagship Solonopole project in Ceara State, northeastern Brazil, the company will start detailed mapping and sampling in the coming week to follow-up on high-grade lithium samples grading up to 9.2% lithium which were taken from the Lapinha zone to the south.

Meanwhile, in the Northern Territory, the company has mobilised an exploration team to start mapping and sampling of historical mineral occurrences within the Mt Denison tenement.