PIERRE, S.D. – Legislation that would place a 10 percent tax on lithium by categorizing it as a precious metal sailed through the South Dakota State House
Monday afternoon by a vote of 57 to nine.
Carried by west river lawmaker Kirk Chaffee, the bill is a product of at least two years of research into the topic. 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?” (1:10)
Lithium mining first began in the Black Hills as early as the 1890s. However, the demand dropped after World War Two.
“Lithimum 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.” (:25)
But more recently interest has once again spiked – 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.