Lithium Valley: Imperial County offers rebates, tax breaks to developers
Aiming to build momentum on "Lithium Valley" development plans, Imperial County supervisors on Tuesday voted unanimously to offer rebates, tax breaks and other possible incentives to any company seeking to produce and use the mineral in the county.
Lithium is a critical component in electric vehicles and smart phones, and prices have soared along with demand in recent years, as the U.S., China and others step up EV production as part of climate change and clean energy policies. One of the world's largest potential reserves of lithium sits deep underground in a vast, boiling geothermal pool in northern Imperial County.
New incentives approved by the board of supervisors include a $50 per-metric-ton rebate on the state's new lithium severance tax, if local producers sell what they produce to an in-county manufacturer, who could also receive rebates. California legislators voted in June to impose flat taxes on lithium producers, ranging from $400 to $800 per ton depending on amounts produced, over howls of protest from two start-up lithium extraction companies, EnergySource Minerals and Controlled Thermal Resources.
On Tuesday, board chair Ryan Kelley said EnergySource, for instance, could earn $1 million a year in tax rebates if it produced 20,000 metric tons of lithium and sold them to a lithium ion battery manufacturer located in Imperial County. The board also voted to opt into a state capital investment program that provides up to 10 years worth of partial property tax reductions. A $1 billion qualified capital investment could receive as much as $80 million off property taxes over a decade, Kelley said.
Calling the package "a great step in the right direction," Controlled Thermal Resources CEO Rod Colwell said in an email, “The County of Imperial’s incentives announcement today was very encouraging. When selecting a location to invest billions of dollars and generate thousands of jobs, one of the highest priorities for battery manufacturing companies is robust incentive packages."
"This could have great potential," agreed EnergySource President and CEO Eric Spomer in an email. "We are reviewing this in detail right now. The specific details are very important in these types of actions."
On Tuesday, representatives from all three companies were on the dais with Kelley, in an apparent show of support for the new policies and requests.
"I got them all smiling," said Kelley afterward.
More than $1 billion in federal funds sought
County officials now also want hefty federal funds, fresh off winning $400 million in state funds last year to amp up lithium environmental reviews and approvals, to evaluate potential health risks and to construct a STEM campus in Brawley. The new requests include $1 billion for a freight rail terminus and expanded tracks to ship lithium out of the county to the ports of New Orleans, Long Beach and elsewhere if necessary, and $50 million to pave roads and repair bridges and canal crossings in the impoverished, rural area designated for potential lithium development.
They are seeking continued help from U.S. Rep. Raul Ruiz, D-Indio, who represents Imperial County and has highlighted its potential to transform the area with billions in new industry. They'd like him to convene a a bipartisan tour of the designated "Lithium Valley" development zone, and to help win placement of a qualified federal staffer in Imperial County to serve as a direct liaison to the Energy and Commerce departments and other federal agencies and officials with access to funds.
Ruiz's spokeswoman said late Tuesday that he has already spoken with the Commerce Secretary about the region's potential, and, having helped host Energy Secretary Jennifer Granholm early last year, is committed to collaborating with county officials on official visits, staffing and collaborative funding efforts.
In a statement, Ruiz stressed Lithium Valley's location near the polluted, fast-dwindling Salton Sea, and said he would work hard to bring in more federal officials and funds: "Today, the Imperial County Board of Supervisors took an important step forward in realizing the full potential of the lithium at the Salton Sea. I have long envisioned a Salton Sea region that leads the way in renewable energy development in an environmentally conscious manner."
Ruiz, who had his district lines adjusted last year, also said, "As the new federal representative for Imperial County, I commend the Board of Supervisors for their commitment to this same vision, and I am excited for us to collaborate closely to build on the Board’s good work announced today. I look forward to inviting more federal stakeholders — like Energy Secretary Granholm who visited last year — to our region to witness first hand the opportunities we have right here in Imperial Valley to help our nation."
Significant federal infrastructure and Inflation Reduction Act funds have already been doled out to other counties and states for domestic supply chain investments, including EV battery and automobile manufacturers of the type that Imperial County hopes to woo here.
So far, a company called Statevolt has announced plans to build a battery plant in Imperial County. But General Motors, major Korean battery manufacturers and others have also expressed interest.
"Samsung, LG, Panasonic, come to Imperial County," said Kelley on Tuesday, in a direct appeal to some of the world's largest battery manufacturers. "We'll give you some carne asada, and we'll show you where it's at."
Janet Wilson is senior environment reporter for The Desert Sun and a Stanford Lane Center Western Media Fellow. She can be reached at jwilson@gannett.com.
This article originally appeared on Palm Springs Desert Sun: Lithium Valley: Imperial County offers rebates, tax breaks to developers
