Syrah Resources Ltd (ASX: SYR) shares have avoided the market selloff and leapt higher today.
At one stage, the ASX 300 mining stock was up as much as 18% to 26.5 cents.
The graphite producer's shares have pulled back a touch since then but remain up 9% to 24.5 cents in late afternoon trade.
Investors have been buying the company's shares today after it announced that it has been awarded a tax credit of approximately US$165 million (~A$269 million) by the US Internal Revenue Service (IRS).
This tax credit award is under the US Inflation Reduction Act's Advanced Energy Project Tax Credit Program, which is also known as the 48C Tax Credit.
According to the release, the 48C Tax Credit will support the potential expansion of the Vidalia active anode material (AAM) facility in Louisiana, USA to a 45ktpa AAM production capacity.
The release notes that the 48C tax credit program, which is managed by the IRS was originally established by the American Recovery and Reinvestment Act of 2009.
It seeks to fund critical projects that expands US critical materials processing and refining capacity and is aligned with the economic and energy security goals of the US Inflation Reduction Act.
The ASX 300 mining stock was selected for the 48C Tax Credit from more than 350 applications for the second US$6 billion round of the program and based on the Department of Energy's (DOE) recommendation.
As well as being a tax credit, Syrah notes that the 48C Tax Credit can be monetised for cash through its transfer, in part or whole, to a third-party US federal taxpayer.
Though, to claim it, the ASX 300 mining stock must satisfy certain requirements. This includes meeting prevailing wage and apprenticeship requirements, satisfying certain certification requirements associated with the 45ktpa AAM Vidalia facility within a two-year period, and placing the 45ktpa AAM Vidalia facility into service within the two-year period following such certification.
Syrah advised that it is progressing transition engineering, permitting and other long-lead procurement activities for the Vidalia Further Expansion project. This is ahead of a final investment decision (FID) to be considered by the Syrah Board.
It notes that commercial AAM sales from the 11.25ktpa AAM Vidalia facility and significant customer commitments are vital for the company to finalise project financing and will determine FID timing.
After which, detailed engineering, long-lead items and other procurement, and construction activities will follow a Syrah Board approved FID sequentially.
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