r/ALOY_SRC

October 4th

America Break China’s Grip on Rare Earths?

China spent decades building a dominant position across rare-earth mining, processing and magnet manufacturing, leaving the US dependent on a foreign supply chain for materials essential to everything from vehicles and wind turbines to electronics and defense systems.

MP Materials is now trying to rebuild that chain domestically, moving from its Mountain Pass mine in California into refining.

But catching up will take more than finding minerals: the US still faces higher costs, limited processing capacity, opaque pricing and a Chinese lead that industry experts say took roughly 25 years to build.

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https://www.bloomberg.com/news/videos/2026-10-04/can-america-break-china-s-grip-on-rare-earths-video?srnd=all

The Government of Canada introduces new Productivity Mega Deduction to help businesses invest, grow and create jobs in Canada

https://www.canada.ca/en/department-finance/news/2026/10/the-government-of-canada-introduces-new-productivity-mega-deduction-to-help-businesses-invest-grow-and-create-jobs-in-canada.html

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Direct benefit for ALOY - SRC

The tax benefit flows directly to taxable private entities ---- specifically ALOY, its Canadian operating subsidiaries, or any taxable commercial joint-venture operating company that purchases, owns, or capitalizes equipment at the facility.

Loss Carryforwards vs. Immediate Cash

As commercial deliveries of separated heavy rare earth oxides (Dy, Tb) generate taxable revenue, the deduction provides a dollar-for-dollar shelter against operating profits.

The high-capex systems ALOY is financing - such as proprietary automated solvent extraction (SX) batteries, high-temperature metallization reduction furnaces, and casting lines - they are fully eligible for the 100% Year-1 deduction.

"This game-changing new tax incentive will increase the amount of assets eligible for immediate expensing from roughly 15% of assets to more than 65%, including fibre-optic cable, greenhouses, mining property, oil and gas pipelines, software, research and development, computer equipment, aircraft and vehicles, patents, rail track, bridges, and roads."

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https://www.dlapiper.com/en-ca/insights/publications/2026/09/canadas-productivity-mega-deduction-what-businesses-need-to-know

https://www.bdo.ca/insights/productivity-mega-deduction-business-tax-benefits-capital-investments-canada

Bloomberg China Rare Earth News Segment

Thank You Canada - Productivity Mega Deduction Announced Today