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Graphite Mining Companies Outraged as Biden Administration Lifts Chinese Graphite Ban

theguru Views  

The U.S. government is set to hold discussions with domestic graphite producers who suffered damage due to the postponement of a ban on graphite from China. It is analyzed as a means to appease graphite mining companies that are dissatisfied with the Biden administration’s decision.

According to industry sources on the 8th, the U.S. government plans to meet with graphite mining companies, which have been dissatisfied with the decision to suspend the ban on Chinese graphite for two years under the final regulations on the tax deduction of the Inflation Reduction Act (IRA). Graphite workers have been requesting that the Biden administration consult on the newly announced regulations, as graphite is one of the key materials for the highly profitable electric vehicle battery.

Erik Olson, spokesman for the North American Graphite Alliance stated, “The Biden administration has requested to meet with our organization to discuss allowing electric vehicles using Chinese graphite to be eligible for a tax deduction.”

The North American Graphite Alliance is expected to criticize the Biden administration’s decision while demanding evidence on whether electric vehicle companies are converting supply chains outside of China.

The North American Graphite Association explained that the ultimate direction and outcome achieved through this agreement are the aspects they are most interested in and will be closely watched.

The U.S. government previously announced on the 4th (local time) that it would temporarily provide subsidies under the IRA even for electric vehicle batteries that use Chinese graphite. This decision is seen as the U.S. Treasury Department partially accepting the objections of electric vehicle and battery companies. Korean electric vehicle and battery companies are also less worried about subsidies in the U.S. market.

As a result, electric vehicles that use Chinese graphite will receive a tax deduction benefit of up to $7,500 by the end of 2026 if they meet the relevant conditions.

The U.S. government has raised doubts about the effectiveness of the IRA tax credit benefit by prohibiting companies that procure parts or key minerals from Foreign Concern Companies (FEOC) such as China, North Korea, and Russia from receiving it since last December. This is because the global electric vehicle and battery industry is currently dependent on minerals from China. Since Chinese graphite accounts for more than 70% of the global market, failure to provide subsidies could cause significant damage to U.S. electric vehicle sales, which is why the U.S. Treasury Department took a step back.

Meanwhile, the North American Graphite Union and others have been confronting China’s monopoly on graphite. Through lobbying, they urged the U.S. government to impose 25% tariffs on three types of Chinese graphite.

theguru
content@viewusglobal.com

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