Syrah Resources (ASX:SYR,OTC Pink:SYAAF) announced that its wholly owned subsidiary Syrah Technologies has received a tax credit of approximately US$165 million from the US Internal Revenue Service (IRS).
In a Monday (January 13) press release, the company said the amount was granted under the US Inflation Reduction Act’s (IRA) Section 48C Qualifying Advanced Energy Project Tax Credit Program.
The American Recovery and Reinvestment Act of 2009 originally established the program. It was subsequently expanded by US$10 billion under the IRA, which manages the program.
The 48C tax credit program seeks to fund critical projects that primarily expand US critical materials processing and refining capacity. Projects must also be aligned with the economic and energy security goals of the IRA.
The credit will support the potential expansion of Syrah’s Vidalia active anode material (AAM) facility in Louisiana, US, which is aiming for AAM production capacity of 45 kilotonnes per annum (ktpa).
Syrah Technologies was selected under the second round of the program from over 350 tax credit applications.
“Under the IRA, the 48C Tax Credit can be monetised for cash through its transfer, in part or whole, to a third-party US federal taxpayer and/or utilised to offset federal corporate income tax liabilities of Syrah Technologies,” Syrah said.
The program has various conditions, including meeting prevailing wage and apprenticeship requirements and satisfying certain certification requirements for Vidalia within a two year period; Vidalia also has to enter service during that period.
Syrah states on its website that the Vidalia AAM facility is its initial downstream position. Its goal is to be “the first major integrated ex-China producer of natural graphite active anode material for electric vehicle batteries.”
The vertically integtated facility’s initial output capacity is 11.25 ktpa. Production started in the first quarter of 2024.
Transition engineering, permitting and other long-lead procurement activities for the project are currently being progressed by Syrah. The company is also awaiting a final investment decision from its board.
Syrah may claim the tax credit once the program conditions are satisfied.
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Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.
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