Westwater Resources Inc (NYSE-A:WWR) has applauded the historic Inflation Reduction Act signed into law by President Joe Biden on August 16, 2022 which includes an investment of $369 billion in climate programs that should, directly and indirectly, benefit Westwater.
In a statement, Terence Cryan, executive chairman of Westwater said: "Our company is uniquely positioned to benefit from this legislation. The legislation provides direct benefits in the form of a Production Tax Credit for future production of advanced anode material from our Kellyton Graphite Plant. In addition, the legislation should increase demand for domestically produced graphite and vanadium, both of which are contained in our Coosa Graphite Deposit - The IRA is good news for Westwater."
The key provision directly benefiting Westwater is the Production Tax Credit for Critical Minerals, which provides a 10% tax credit for the costs of producing certain critical minerals, including graphite and vanadium. This credit is eligible for direct payments and is also transferable to unrelated taxpayers. Battery-grade graphite produced at the Kellyton Graphite Plant should be eligible for this tax credit.
READ: Westwater Resources ends second quarter 2022 with cash of $109M; updates on Kellyton graphite plant
The key provision indirectly benefiting Westwater is the Clean Vehicle Credit. The IRA eliminates the limitation on the number of electric vehicles a manufacturer can sell before the credit is phased out or eliminated. The IRA sets a minimum threshold for the percentage of the value of applicable critical minerals contained in the battery of the electric vehicles. This provision should indirectly benefit Westwater by increasing demand for domestically produced graphite and vanadium.
Westwater Resources, an energy technology company, is focused on developing battery-grade natural graphite. The company's primary project is the Kellyton graphite processing plant that is under construction in east-central Alabama.
Contact the author at jon.hopkins@proactiveinvestors.com