ioCorp Developments Ltd reports that the State of Nebraska has conditionally approved a package of tax incentives for its Elk Creek Superalloy Project that may be worth more than $100 million over the first 10 years of the project’s commercial operation. Even with these incentives, the project is estimated to generate cumulative tax revenue to state and local Nebraska units of government of several hundred million dollars over its estimated 32-year lifespan from corporate income, sales, real and tangible personal property, payroll, and other taxes.
The tax incentives would be granted under the Nebraska Advantage program, which is authorized by state statute to provide tax and other incentives to qualifying companies that establish manufacturing operations in the state and meet and maintain certain investment and job creation goals.
Actual amounts of any tax incentives provided to the project will depend upon many factors, including state and federal tax rates, allowed deductions, debt service levels, and other factors that determine state and federal tax liabilities at the time any incentives are realized. The financial model used in NioCorp’s Elk Creek project feasibility study assumed the receipt of some state tax incentives, so these preliminary tax incentive estimates are not expected to materially impact the economic results forecast in the project’s feasibility study.
Based on the Elk Creek project feasibility study, if the project is financed, constructed, and placed into commercial operation, it is estimated by NioCorp to result in substantial macroeconomic benefits to Nebraska, including the following:
- Of the more than $1 billion in net upfront capital expenditures required to construct and bring the project into operation over that period, a large portion of those funds may be spent in Nebraska
- Once in production, the project is estimated to support as many as 466 full-time jobs, generating an average of $39 million in annual payroll. Additionally, $129 million is estimated to be required for annual operating expenditures. Over the operational life of the project, an estimated $5.3 billion will be spent on operating expenses
- In addition to the construction jobs and full-time operational workers, the project may support the creation of more than 1,000 additional jobs in Nebraska and throughout the economy. This estimate is based on the US Bureau of Economic Analysis’ estimate that 2.3 additional jobs are created for every job directly associated with an average metal mining project.
NioCorp is developing the superalloy materials project in southeast Nebraska that will produce niobium, scandium, and titanium. Niobium is used to produce superalloys as well as High Strength, Low Alloy steel, which is a lighter, stronger steel used in automotive, structural, and pipeline applications. Scandium is a superalloy material that can be combined with aluminium to make alloys with increased strength and improved corrosion resistance. Scandium also is a critical component of advanced solid oxide fuel cells. Titanium is used in various superalloys and is a key component of pigments used in paper, paint and plastics and is also used for aerospace applications, armour and medical implants.