Standard Lithium Secures U.S. Endorsement to Spearhead Arkansas Lithium Initiative

Post by : Bianca Suleiman

As Arkansas emerges as a potential powerhouse for lithium production, Standard Lithium has garnered substantial support from federal authorities. The Vancouver-based firm is competing with Exxon Mobil to exploit one of North America's largest lithium deposits, reflecting a rising urgency in the U.S. for a self-sufficient supply of battery metals.

Prominent U.S. senators, the Department of Energy, and federal permitting entities have endorsed Standard's initiative this year. Additionally, some international partners are considering financial contributions to advance the project.

For over seven years, Standard has honed its direct lithium extraction (DLE) technology. Exxon made headlines in 2023 with a $100 million investment in the region, but has postponed its plans by a year. Standard aims to commence production on its 30,000-acre site by 2028.

The company encountered challenges in 2022 when a short-seller criticized its DLE method, causing its share price to plummet nearly 30% in one day. Nevertheless, Standard has adjusted its strategy by collaborating with Koch Industries to utilize a new adsorbent material and securing Norwegian energy titan Equinor as a partner in the $1.45 billion initiative.

“Standard's evolution through multiple technology iterations is a robust attribute,” noted Allison Kennedy Thurmond of Equinor. Since the short-seller's critique, bearish positions have decreased by over half, and five analysts from Wall Street currently endorse purchasing the stock.

Arkansas is situated above the Smackover formation, which boasts extensive underground reserves with brines holding more than 5 million metric tons of lithium. In January, the Department of Energy granted Standard $225 million to facilitate lithium processing in the area, while the company maintains regular discussions with federal officials. Fast-track permitting is being considered to hasten production timelines.

Standard anticipates lithium prices could escalate to an average of $22,000 per metric ton over the two-decade project span, with production costs projected at $5,924 per ton. Ongoing negotiations with banks and foreign governments for $1 billion in project financing are currently underway, with decisions expected shortly. Arkansas Governor Sarah Huckabee Sanders has also expressed robust support for the state's burgeoning lithium sector.

As domestic lithium production gains traction, Standard Lithium appears set to play a pivotal role in shaping the future of battery metal sourcing in America.