LITTLE ROCK (KATV) — A major milestone has been reached in Arkansas’ highly anticipated lithium boom—its first customers.

Smackover Lithium has secured the first binding offtake agreement with a commercial client for lithium extracted in Arkansas.

“So this lithium from Arkansas will find its way into global markets, ex China,” said Jesse Edmondson, Standard Lithium’s director of government relations.

Commodity trading firm Trafigura Trading has just signed a 10-year agreement to buy 8,000 metric tonnes of battery-quality lithium carbonate per year from Smackover Lithium’s South West Arkansas Project, a joint venture between Standard Lithium and Equinor, a Norwegian company.

For context, the U.S. as a whole only produces about 5,000 tonnes of battery-grade lithium a year.

“The SWA project, once in full production, will produce 22,500 tonnes per year,” Edmondson said. “So this 8,000-tonne-per-year agreement is significant, right? That’s over a third of our annual offtake.”

Last year, Standard Lithium received a $225 million grant from the U.S. Department of Energy to advance lithium extraction from the Smackover Formation, a briny aquifer beneath southern Arkansas that many hail as what could be America’s best domestic source of the critical mineral.

Beating companies like Chevron and Exxon to the punch, Standard Lithium pioneered direct lithium extraction and since 2020 has operated a demo plant in El Dorado. The company is building a larger facility in Lafayette County that is set to begin operation in 2028.

“We’ve got the only proven technology that works in the Smackover that’s been done through our commercial demonstration plant in El Dorado since May of 2020. And really that has been the proving ground which has unlocked a lot of the federal opportunities for us. So we’re the largest recipient of a DOE grant in the critical mineral space in this hemisphere,” Edmondson told KATV.

“So [we’re] really excited to bring lithium production to the state of Arkansas and really back to the United States. The U.S. used to be a leader in lithium production 40, 50 years ago. So it’s time to reclaim that status,” he said.

The market price of a tonne of battery-grade lithium is volatile, but has recently ranged between $10,000 to $12,000, so the value of what Standard Lithium alone is expected to produce could exceed a quarter of a billion dollars annually.

That’s not counting what Exxon, Chevron, and other companies may produce once they get up and running.

Joseph Flaherty

jflaherty@adgnewsroom.com

Joseph Flaherty covers the city of Little Rock for the Arkansas Democrat-Gazette. A graduate of Middlebury College and Columbia University’s Graduate School of Journalism, he has worked for the newspaper since 2020.