Australia's major lithium mines may lose eligibility for US government subsidies due to new rules issued by the US Department of Energy, which exclude critical minerals with high levels of Chinese ownership or processing.
Companies over 25% owned by Chinese, North Korean, Iranian, or Russian shareholders will be excluded from subsidies under US President Joe Biden's green initiatives. Miners with non-Chinese lithium businesses, such as Wesfarmers (ASX:WES) and Liontown Resources (ASX:LTR), could still qualify for subsidies.
While Australian miners anticipated benefits from Biden's agenda, China's significant role in the Australian lithium sector may hinder access to subsidies.
The draft rules, which are still under consultation, also consider the processing of critical minerals.
The regulations are part of Biden's Inflation Reduction Act and Infrastructure and Jobs Act, aiming to incentivise sourcing minerals from nations with US free trade agreements.