Syrah Resources Limited (ASX: SYR) has announced that its wholly-owned subsidiary, Syrah Technologies LLC, has received a US$11.7 million direct payment from the US Internal Revenue Service. This payment represents the company’s first Advanced Manufacturing Production credit under Section 45X of the Inflation Reduction Act (IRA). Syrah (ASX code: SYR) is an Australian Securities Exchange listed industrial minerals and technology company with its flagship Balama Graphite Operation in Mozambique and a downstream Active Anode Material Facility in the United States. The Section 45X Production Credit relates to Syrah Technologies’ claim in its 2024 tax return filing, connected with the 11.25ktpa Active Anode Material (AAM) facility in Vidalia, Louisiana.
The cash proceeds from this Section 45X Production Credit are held in restricted accounts. Subject to the approval of the US Department of Energy, these funds may be used to finance Vidalia’s operating costs, net of revenue. The company anticipates that direct payments for further Section 45X Production Credits will generally be received during the second half of the calendar year.
Syrah Technologies is eligible for Section 45X Production Credits equivalent to 10% of Vidalia’s production costs, encompassing both material costs and tax depreciation. When the 11.25ktpa AAM Vidalia facility operates at full capacity, Section 45X Production Credits are estimated to be approximately US$7-9 million per annum, or about US$0.62-0.80 per kilogram of AAM, before any phase-down.
The Section 45X Production Credits will be phased down to 75% in 2030, 50% in 2031, 25% in 2032, and will be eliminated from 2033 onwards. Syrah has elected to receive direct payments of Section 45X Production Credits from the US Internal Revenue Service, which is treated as an overpayment of tax and is refundable in cash. The announcement was authorised by Shaun Verner, Managing Director, on behalf of the Syrah Board.
