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Geothermal lithium developers warn against California lithium tax

Geothermal lithium developers warn against California lithium tax Desert Shore, Salton Sea, California (source: flickr/ shastared, creative commons)
Carlo Cariaga 1 Jul 2022

A new tax on lithium production has been passed in California despite warnings coming from developers of geothermal brine projects in the Salton Sea.

Controlled Thermal Resources Ltd. (CTR) and EnergySource Minerals LLC, both developers of geothermal brine projects in the Salton Sea, California, have warned that a proposed new lithium tax will scare off investors and customers. Despite these warnings, California had already approved the plan as part of a must-pass budget.

The lithium tax will impose new taxes on electric vehicle battery lithium to generate revenue for environmental remediation projects. The tax is scheduled to go into effect in January. It is structured as a flat-rate per tonne, but state officials have considered potentially switching to a percentage-based scheme. Funds generated from the tax are earmarked to help in the cleanup of the Salton Sea, an area heavily damaged by pesticide use in the 20th century.

“Supporting a tax that ensures lithium imports from China are less expensive for auto manufacturers to secure will devastate this promising Californian industry before it has begun,” said CTR CEO Rod Colwell. CTR said that the tax will cause them to miss the deadlines to deliver lithium to electric vehicle manufacturers General Motors Co and Stellantis NV.

EnergySource Minerals LLC also said that the tax has caused discussions to stop with potential financiers and auto manufacturers. Earlier this year, EnergySource Minerals entered into a strategic partnership with Schlumberger New Energy to accelerate the deployment of the ILiAD lithium extraction platform.

Source: Mining.com