The time for doubting the birth of a real lithium industry in southwest Arkansas is over.
The only remaining question is this: How big will the industry’s potential be?
Two of the nation’s largest companies have committed hundreds of millions of dollars to drilling for underground lithium and building billion-dollar extraction plants to extract battery-quality lithium from brine in the Smackover geological formation.
This month, Tetra Technologies Inc. of The Woodlands, Texas, announced the results of a technical resources study for what it calls its Evergreen Brine Unit in Lafayette and Columbia counties. The 6,138-acre unit is made up of brine assets of Tetra and Saltwerx LLC, a wholly owned subsidiary of energy giant ExxonMobil.
The Arkansas Oil & Gas Commission authorized the project unanimously in September, making it the first newly established brine unit in the state in nearly 28 years.
Tetra’s report released Jan. 8 declared that the companies have high confidence in the project. The study estimated that the acreage contains 137,000 tons of lithium, including 32,000 tons of measured lithium, 53,000 tons of indicated lithium and 52,000 tons of “inferred” lithium.
The companies applied a “conversion factor” to compute how much lithium carbonate equivalent the project could contain. Lithium carbonate is coveted by lithium-ion battery manufacturers. The Evergreen Brine Unit “is estimated to contain in total 729,251 tons of LCE,” a Tetra news release said.
In September, a ton of lithium carbonate was worth about $30,000. Do the multiplication, and you can see why Exxon Mobil reportedly paid more than $100 million to Galvanic Energy for mineral leases in Columbia and Lafayette counties, and why Koch Industries of Wichita, Kansas, has committed $100 million to plans by Standard Lithium of Vancouver to build lithium extraction plants in El Dorado and near Lewisville.
The Tetra Technologies study also found ample supplies of bromine in the unit. Companies like Albemarle and Lanxess have extracted bromine from south Arkansas brine for years, and they are also involved in lithium projects.
Tetra and Saltwerx drilled two test wells on their acreage and used data from Standard Lithium’s wells nearby to analyze lithium and bromine levels, reservoir pressure and thickness details, and porosity and permeability. Tetra President and CEO Brady Murphy called the study “very positive.”
“The bromine resources were in line with our expectations, but the total lithium resources greatly exceeded our expectations and is more than three times the previous estimate of 234,000 tons of Inferred Resources from our previous 5,100-acre study.” Murphy said the estimated 22 tons per acre of lithium in the unit “is believed to be the highest to date of any lithium brine resource in the U.S.” for projects that have published required technical reports.
Gov. Sarah Huckabee Sanders expects ExxonMobil to invest hundreds of millions more in the area, and the company says it hopes to be producing lithium in Arkansas by 2027. It expects to be a leading global supplier by 2030.
Meanwhile, Standard Lithium is moving forward with plans to build extraction plants using Koch Technology Solutions’ lithium selective sorption systems. The El Dorado plant, in partnership with Lanxess, could produce 5,000 tons of lithium per year. A much larger $1.3 billion plant on 118 acres that Standard bought in Lafayette County could deliver 35,000 tons a year.
Tetra hopes to complete a lithium front-end engineering and design study, or FEED, early this year, Murphy said. “Once our lithium FEED study is completed, we intend to publish an economic analysis for the brine unit,” he said.
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