Chilean-mined lithium used for EV batteries and other products will be eligible for US tax benefits, its government has said.
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The incentives are those outlined by the US Inflation Reduction Act (IRA), which includes subsidies for EVs, based on their battery metal sourcing, Reuters reports.
Chile, in South America, is the world’s second largest lithium producer. It has a free trade agreement with the US.
Under IRA rules, a certain percentage of critical minerals in EV batteries must come from the US or a country it has a free trade agreement with.
The economy ministry said that the tax breaks will incentivise Chile’s export of raw lithium materials as well as more expensive cathode material and lithode byproducts.
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By GlobalDataEarlier this year, Hyundai Motor Group signed a long term agreement with Chilean mining group Sociedad Quimica y Minera de Chile (SQM) for the supply of lithium hydroxide for its EV batteries.
