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The development of the south Arkansas lithium industry awaits a decision by the state Oil & Gas Commission on royalty rates for mineral rights owners, as our Kyle Massey illustrated last week.
The five big companies involved in the industry in southern Arkansas are proposing a rate of 1.82% of the market value of battery-quality lithium carbonate. The South Arkansas Minerals Association, representing landowners in the four-county region where companies plan to pump up brine to extract its bromine and lithium, say that’s far too low.
Emon A. Mahony Jr. of El Dorado, the founder and first president of the Minerals Association, and Robert Reynolds, the current president, think the lithium royalty rate for mineral owners should be set at 12.5% of sales of lithium carbonate equivalents derived from their brine fields.
We don’t have the expertise to determine a fair rate. But we do know that the global lithium market was valued at $22.19 billion in 2023 and is expected to grow to $134.02 billion by 2032, according to Fortune Business Insights. That’s a compound annual growth rate of 22.1%.
Lithium is in growing demand. Arkansas has it. Now it’s up to the commission to set a rate that will allow the industry to reach its full potential.
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