U.S. Inflation Reduction Act Aims to Boost Domestic Supply Chains for Critical Minerals

• The Inflation Reduction Act by the US government aims to boost domestic supply of critical minerals.
• The Act can apply to countries with trade agreements or partnerships with the US.
• China currently dominates the refined lithium product and battery supply chains.
• There's a need to develop diverse supply chains to not be dependent on one primary source, like China.
• While lithium is the primary focus, other critical minerals are also essential for ensuring global competitiveness.

American Lithium is a mining company focused on developing lithium projects throughout the Americas. With operations in the lithium-rich regions of Nevada and Peru, the company is positioned to be a major supplier of the essential battery metal.

For over a decade, American Lithium has been actively engaged in the development of large-scale lithium projects within mining-friendly jurisdictions. The company is currently focused on the continued development of its strategically located TLC Lithium Claystone Project in Nevada, as well as advancing its Falchani Hard-rock Lithium Project and Macusani Uranium Project in Peru. Robust preliminary economic assessments have been completed on all three projects, which exhibit significant expansion potential and enjoy strong community support. Pre-feasibility work is well underway at the Falchani project and has commenced at the TLC project.

Act Incentivizes Domestic Production and Supply Chains

The recently passed U.S. Inflation Reduction Act contains provisions aimed at boosting domestic production of critical minerals needed for technologies like electric vehicles. According to American Lithium CEO Simon Clarke, this move is an important step towards securing supply chains free from foreign reliance.

In a recent interview, Clarke discussed how the Inflation Reduction Act incentivizes domestic critical mineral supply chains. "I think it’s been good to see the color on the inflation reduction act in the last few days, that it has shown that it can apply to other countries that are Partners or have trade agreements with the US," Clarke said. "And you know we need all of the knowledge base that a lot of countries have outside of the US and to be honest all of the critical minerals as well."

U.S. Currently Dependent on Foreign Supply Chains

Clarke noted that currently, China holds significant control over the global supply chains for refined critical minerals and battery products. The Inflation Reduction Act aims to shift this balance by progressively ramping up requirements for locally sourced minerals to qualify for tax credits.

According to Clarke, this approach will be critical for the U.S. to reduce dependence on foreign supply chains. "I think this is a critical approach to ensure that we develop Supply chains that we have to have if we're not going to be held hostage down the line, and if we're going to be able to truly compete on a global basis," he said.

Boosting Domestic Capacity Important for National Security

By leveraging partnerships with allied nations and boosting domestic production capacity, Clarke believes the Inflation Reduction Act puts the U.S. on the path towards securing control over critical mineral resources. This will strengthen national security and allow American companies to better compete globally in technologies like electric vehicles.