Washington, D.C. – U.S. Senator Catherine Cortez Masto (D-Nev.) introduced legislation to strengthen the domestic supply chain for rare-earth magnets manufactured in the United States by creating a production tax credit for companies that create these magnets. The Rare Earth Magnet Production Tax Credit Act would provide a $20 per kilogram production tax credit for magnets that are manufactured in the U.S. and increase the credit to $30 per kilogram for magnets manufactured in the U.S. whose components are produced, recycled, or reclaimed domestically.
“Nevada’s booming clean-energy industry depends on rare earth magnets, which is why we need to make sure we’re strengthening a domestic supply chain for these magnets,” said Senator Cortez Masto. “This will create good-paying jobs, support Nevada businesses, and bolster our national security.”
“Recent events have demonstrated the importance of secure, domestic supply chains to America’s economic and national security interests,” said James Litinsky, Chairman and CEO of MP Materials. “MP Materials is investing $700 million and hiring hundreds of Americans across Nevada, California, and Texas over the next few years to bring the rare earth supply chain home. The Senate introduction of this bipartisan policy is an important step that will help accelerate this effort.”
Currently, the U.S. lacks commercial-scale capability to process rare earth oxides and manufacture permanent magnets used in the automotive, renewable-energy, and defense industries. This means that the U.S. relies on imports for 100 percent of its rare earth magnet needs, the majority of these magnets produced in China, which dominates the market. These magnets are used in a wide variety of manufactured goods critical to economic and national security, such as computer component parts, cell phones, defense systems, and vital health care equipment. They are also critical for clean-energy products.
Congressmen Eric Swalwell (D-Calif.-15) and Guy Reschenthaler (R-Penn.-14), co-chairs of the Critical Materials Caucus, introduced this bill in the U.S. House of Representatives.
Through her Innovation State economic agenda, Senator Cortez Masto has been a longtime proponent of renewable and sustainable energy. The Bipartisan Infrastructure Law includes legislation Cortez Masto secured to promote Nevada’s mining and emerging battery industries and set up a sustainable critical mineral supply chain. She recently introduced legislation to expand the solar manufacturing supply chain in the U.S. She secured an extension of the Investment Tax Credit and the residential renewable energy tax credit for solar in the 2020 government funding bill. Senator Cortez Masto was also able to successfully advocate for two additional years of renewable energy tax credits for the solar industry and its workers.