Recent changes to U.S. clean energy policy are creating new opportunities for mining operations and royalty holders. In a landmark update, the U.S. Treasury Department expanded the eligibility for the 45X tax credit under the Inflation Reduction Act (IRA) to include certain mining activities. Previously focused on clean energy manufacturing and processing, the tax credit now acknowledges the essential role of domestic mineral extraction in building a robust clean energy supply chain.

The 45X tax credit provides a 10% incentive for eligible production activities, including components for electric vehicles, batteries, and solar panels. This adjustment enables U.S.-based mining companies to claim credits for the extraction of critical minerals such as lithium, nickel, and rare earth elements, as long as they meet specified conditions. The change reflects growing recognition of the importance of securing domestic sources of minerals critical to renewable energy technologies.

For royalty holders, this policy shift could lead to increased demand for mineral resources and potentially higher returns on their assets. As the clean energy transition accelerates, the value of U.S. mineral royalties is likely to grow alongside rising investment in domestic mining projects.

At Precision Mineral Accounting, we monitor these developments closely to help our clients stay ahead of industry changes. With our expertise, we ensure your royalties remain optimized and aligned with the evolving regulatory landscape.