In Early Action, Lanxess Converts Loan Into Standard Lithium Shares

Lanxess, the German chemical multinational with major bromine production infrastructure in south Arkansas.

Standard Lithium of Vancouver, British Columbia, which has been producing test batches of one of the building blocks of lithium-ion batteries extracted from south Arkansas’ underground geothermal brines, announced Monday that partner Lanxess Corp. has embraced an early conversion of a $3.75 million loan previously advanced to the Canadian startup.

With a successful test plant in El Dorado producing lithium chloride with a proprietary process taking advantage of Lanxess’ well-and-pipeline infrastructure for deriving bromine from the Arkansas brine, Standard is at the cusp of a new industry in Arkansas. The conversion suggests that Lanxess’ confidence in Standard’s project has solidified.

The conversion will let Standard eliminate its long-term debt and strengthen its balance sheet for further development, and will poise Lanxess, a German multinational chemical company, as a key shareholder.

The arrangement, which gives Lanxess 6.25 million common shares and 3.1 million share purchase warrants at a specific price through June 2024, also reduces interest expenses.

Each warrant can be exercised for a share in Standard at a price of $1.20 in Canadian currency, about $1 U.S. at current exchange rates.

Standard is testing and proving the commercial viability of lithium extraction from some 150,000 acres of brine operations in south Arkansas, where its first-of-its-kind industrial-scale direct lithium extraction demonstration plant shares space at Lanxess’s south plant facility. 

The demonstration plant uses the company’s proprietary LiSTR technology to selectively extract lithium from the brine Lanxess has already used in extracting bromine, a chemical used in fire retardants, among other products.

The demonstration plant is being used for proof-of-concept and commercial feasibility studies. The scalable, environmentally friendly process eliminates the use of evaporation ponds, reduces processing time from months to hours and greatly increases the effective recovery of lithium. 

The company is also pursuing the resource development of more than 30,000 acres of separate brine leases located in southwestern Arkansas, and about 45,000 acres of mineral leases in the Mojave Desert in San Bernardino County, California.