The South Dakota House voted 57 to 9 Monday to place a 10 percent tax on lithium by categorizing it as a precious metal.
The bill is a product of at least two years of research into the topic. Sponsor, Representative Kirk Chaffee brought a similar bill last year, which was defeated in the Senate due to concerns about technicalities in the language.
“Currently, state law doesn’t tax the severance of lithium,” Chaffee said on the House floor. “So my question for you today is why would we allow mining companies from around the world to surface mine the Black Hills and pay no tax on what they mine?”
Lithium mining first began in the Black Hills as early as the 1890s, however, the demand dropped after World War Two.
“Lithium was primarily used during the war (WWII) effort as grease for the train tracks,” Chaffee continued. “It was estimated that it was almost a $400M worth of lithium mining out there.”
But more recently interest has once again spiked as the mineral is an important component now being used to build cell phones, batteries, and other electronic devices.
The bill faced opposition from lobbyists representing the mining industry in committee – who said that lithium mining claims in the Black Hills were still minimal.
The bill now heads to the Senate.
(Austin Goss, SDBA)