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Koch Deepens Involvement in El Dorado Lithium Plant

3 min read

Standard Lithium Ltd., the Canadian company developing a new lithium extraction industry in the brine fields of south Arkansas, has partnered with Koch Minerals & Trading of Wichita, a division of Koch Industries, in a chemical off-take agreement.

The deal calls for a market-based pricing mechanism for Koch Minerals & Trading to procure off-take at Standard’s pilot plant in El Dorado, which is testing commercial viability for lithium extraction from subterranean saltwater already being used for bromine extraction in old Arkansas oil fields.

The off take deal, outlined in a letter of intent between Standard and Koch, is an example of a deal to buy or sell, in advance, some of a producer’s goods that haven’t yet been made, making it easier for producers to obtain financing.

This type of agreement can be negotiated far in advance, often prior to construction of manufacturing facilities and before actual production has begun. Standard has been extracting lithium products for two years, but at a test scale. Standard CEO Robert Mintak hopes to eventually build a full-scale plant the size of a waste treatment facility.

Standard Lithium, of Vancouver, British Columbia, will “leverage Koch’s global procurement capabilities to assist in sourcing key raw materials,” the company said in a news release Tuesday.

The letter of intent will not affect Standard’s existing and contemplated agreements with Lanxess, the German multinational that mines bromine in El Dorado and has partnered in the lithium extraction process by attaching Standard’s plants to its existing bromine infrastructure, including wells and pipes.

“Koch is a significant investor in Standard Lithium, and we are excited to expand on this strategic relationship,” Mintak said in a statement. “Developing a market-based pricing off-take structure with KM&T at our South-West Arkansas project will allow the company to benefit from the projected high prices for lithium chemicals in the coming decade and beyond,” said Robert Mintak, Standard Lithium’s CEO.

He added that Koch’s buying power and commodity trading capabilities should maximize Standard’s procurement efficiency, optimizing “the price, quality and quantity of reagents required to operate the plants in the future.” Those capabilities, Mintak said, will be meaningful both for financing and successful operation of a full-scale lithium extraction operation.

“KM&T is focused on applying its existing trading, marketing and logistics capabilities to lithium and other critical materials of the future,” Jon Chisholm, vice president of KM&T business development, said in the release. “These capabilities help producers optimize the sourcing of key raw materials and marketing of valuable finished products. We are excited about the strategic relationship with Standard Lithium and believe our combined capabilities will create superior value in the lithium value chain.”

The south Arkansas project is Standard’s flagship, testing and proving the commercial viability of lithium extraction from over 150,000 acres of permitted brine operations. Its proprietary approach to extracting the element from brine “is the key to unlocking a globally significant Smackover lithium resource that is fast, efficient, and environmentally friendly,” the company said.

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