Albemarle Corporation lithium operation at Silver Peak, Nevada|Doc Searls|CC BY 2.0
With the world going increasingly electric, the demand for lithium, a key ingredient in batteries, is skyrocketing. America wants to be a major producer of the mineral but is tangled in complex and uncertain state regulations.
Some of the mineral-rich states in the US, including Texas, Louisiana and Oklahoma, are scuffling over ownership rights and valuation and are confused about the regulatory oversight of lithium.
- Nevada, which has the only commercial US lithium operation, taxes minerals at a rate based on each facility’s revenue due to lack of regulation.
- California has imposed a flat-rate tax on lithium extraction, which is opposed by EV makers GM and Stellantis, delaying project development.
- Officials in Arkansas, where several companies aim to produce lithium, continue to debate over royalty structures for landowners.
Different regulations in various states are what is causing confusion and legal ambiguities.
These challenges pose huge hurdles for investors and industry stakeholders. They are stalling capital investments and projects, including ones from energy titans Exxon and Albemarle.
Act now or rely on China
The global lithium demand is projected to exceed supply by 500,000 metric tons annually by 2030, underscoring the urgency for the nation to ramp up its production or rely on Chinese dominance in the critical minerals sector.