The federal government recently finalized rules for a manufacturing tax credit to enhance U.S. clean energy and critical mineral production. This initiative could aid the Sibanye-Stillwater mine near Columbus, facing potential layoffs of around 700 workers due to an influx of Russian palladium.
The Department of Treasury and IRS announced the final rules for the Advanced Manufacturing Production Credit, part of the Inflation Reduction Act. This credit offers a 10% benefit to companies mining critical minerals such as those in the Sibanye-Stillwater mines in Montana.
Initially, amendments included critical mineral production for the credit, but guidance from last December suggested only refiners would benefit. Sibanye-Stillwater requested changes, advocating with Congress members like U.S. Sen. Jon Tester to address the issue.
The company stated that the final rules now incorporate desired amendments, including extraction costs toward the tax credit. These changes are seen as “very favourable” and beneficial for Montana operations.
CEO Neal Froneman emphasized that the financial support from this credit is crucial for stabilizing U.S. Platinum Group Metals operations, aiming to reduce costs and boost productivity.
After announcing plans to lay off 700 employees due to a $350 million loss from plummeting palladium prices, the company blamed the market glut on Russian imports. In response, Senators Tester and Steve Daines proposed legislation to ban Russian palladium imports.
Tester, concerned about the credit’s applicability, had previously urged Treasury Secretary Janet Yellen to amend the rule, stating it incentivized foreign over domestic minerals. He communicated directly with Deputy Treasury Secretary Wally Adeyemo and sent further letters highlighting Russian market impact.
Daines criticized the exclusion of mineral extraction from the credit as “shortsighted.” He wrote to Yellen advocating for inclusion of extraction costs, supporting Montana miners.
Tester met with Columbus residents affected by layoffs and supported state applications for worker assistance grants. The amended credit, he stated, is a success of local advocacy.
Daines, who opposed the Inflation Reduction Act, acknowledged the rule changes as positive but viewed them as politically motivated.
Sibanye-Stillwater believes these changes will support “continued operations and long-term sustainability” in Montana. Heather McDowell, VP of legal and external affairs, expressed gratitude for the Treasury’s amendments, essential for stabilizing U.S. palladium and platinum production.
McDowell thanked Tester for his persistence, noting the global palladium market challenges and the crucial role of the tax credit in maintaining sustainable critical mineral production in the U.S.
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