Sen. Jon Tester greets supporters in Bozeman, Mont., earlier this month. Photo: Louise Johns for The Washington Post via Getty Images
The Biden administration's decision to allow mining costs to qualify in a permanent 10% tax credit is a boon to battleground-state lawmakers like Sen. Jon Tester who pressed for the change.
Why it matters: Thursday's Treasury Department final rule — a reversal of its earlier draft position on the mining-cost issue — is a gift to the Montana Democrat locked in a tight reelection race.
- Tester has been scrambling to contain the fallout from layoffs announced in September of about 700 workers at a palladium and platinum mine.
- Sibanye-Stillwater, a South African mining firm, cited Treasury's initial 45X guidance that didn't include extraction costs.
Other Senate Democrats from purple mining states — Jacky Rosen and Catherine Cortez Masto of Nevada, Bob Casey of Pennsylvania, Mark Kelly of Arizona — had also urged Treasury to include mining costs.
Driving the news: The final rule was a result of Tester's "relentless pressure," which included a personal call to Deputy Treasury Secretary Wally Adeyemo within hours of the layoff announcement, according to a news release from the senator's office.
Reality check: 45X may not be top of mind for many voters.
- Polls show Tester trailing as his GOP opponent, Tim Sheehy, has sought to paint him as extreme on a range of issues.
- Montana GOP Sen. Steve Daines, who also supported including mining costs, issued a statement calling the guidance "a cynical and desperate political attempt to get votes right before the election. Montana's mining families will see through it."
Between the lines: It's also unclear whether the credit is enough to stabilize operations at the Montana mine, which has seen plummeting palladium prices.
- Sibanye-Stillwater issued a statement praising Tester's "perseverance in ensuring this rule is right" and called the tax credit "an important step in stabilizing our operations."
- But it didn't return a request for comment on whether the credit would change its outlook.
Friction point: Some renewable energy and supply chain supporters applauded the 45X rules, which also cover U.S. manufacturing of batteries and solar and wind components.
- But environmental groups expressed frustration.
- "The administration ignored clear congressional intent and willingly turned a blind eye to frontline community concerns over the environment and public health," said Blaine Miller-McFeeley, senior legislative representative for Earthjustice.
Miners weren't totally happy with the guidance, either.
- 45X would benefit mines that have refining capabilities that can process raw material into a qualifying component.
- And imported minerals could ultimately benefit from 45X so long as they are "substantially" processed in the U.S., according to administration officials.
- "By making U.S.-processed, foreign-sourced materials available for the credit, we're not solving the problem," Rich Nolan, CEO of the National Mining Association, said in a statement.
Our thought bubble: The credit is likely here to stay regardless of the election. A Trump White House and/or GOP control of Congress could seek to expand 45X's use for mining and add foreign import restrictions.
