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Preliminary Study Foresees $1.27B Standard Lithium Project in Arkansas

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Standard Lithium of Vancouver, British Columbia, announced positive results Tuesday from its preliminary study of the feasibility of a $1.27 billion lithium production project in southwest Arkansas.

The company, which has pilot lithium production facilities in El Dorado, has found significant concentrations of lithium in the subterranean brines of the Smackover Formation in the southwest corner of the state and in east Texas.

The preliminary study results project a $3.1 billion after-tax net present value estimation and a minimum 20-year lifespan for facilities to produce 30,000 tons of lithium hydroxide monohydrate per year. LHM is a key ingredient for the production of lithium-ion batteries and a coveted resource as domestic production of electric vehicles takes off.

One company official said the findings position Standard to be a significant lithium producer before 2030.

The southwest Arkansas project is about 15 miles west of Magnolia and Standard has more than 27,000 net acres leased for lithium production in Columbia and Lafayette counties.

The study also found favorable project economics and competitive operating costs for the project, which the publicly traded company calls SWA. The $3.1 billion after-tax net value projection is encouraging, the company said in a news release, as was an internal rate of return finding of 35.4%, assuming that Standard does produce 30,000 to 35,000 tons per year and a long-term price of $30,000 per ton for lithium hydroxide monohydrate.

Operating costs were projected to be just over $4,000 per ton over the life of the project, the company said.

The study’s findings showcase the project’s “incredible potential,” company President and COO Andy Robinson said in a statement. “Our exploration program in the first half of this year yielded significantly improved lithium concentrations and grew the total resource to 1.8 million tons of lithium carbonate equivalent. The upgraded resource underpins an operating life of at least 20 years at competitive costs.”

He said Standard’s team has also been working hard at the demonstration plant at the Lanxess South facility in El Dorado, where the company has used the German multinational’s bromine infrastructure to process 14 million gallons of Smackover brine and successfully process lithium from it. For years, Lanxess has drawn bromine from the brine, which was once a byproduct of oil and gas well drilling.

“We now have a well-tested direct lithium extraction (DLE) process, and we successfully converted our DLE product into battery-quality lithium hydroxide,” Robinson said. “This start-to-finish proven process, combined with an improved resource at SWA, positions the project to be a meaningful contributor to U.S. lithium supply within this decade.”

‘Premier’ Resource

Robert Mintak, Standard’s CEO, said in a news release that the study results solidifies south Arkansas’ status as North America’s premier lithium brine resource. “Our mission is to boost domestic lithium production through a phased development approach.”

He said the company aims to “deliver the first new lithium production facility in the U.S.” once it has results from a feasibility study coming soon.

“These encouraging outcomes from SWA, along with our initiatives in East Texas, underscore the need for simultaneous advancements within our project portfolio, as we are dedicated to leading the region into becoming a key player in America’s lithium supply chain,” Mintak said.

Plans call for Standard to start construction of a commercial lithium production plant — one that Mintak likened in size to a water treatment plant — and have it producing sometime in 2027, subject to due diligence, available financing and the results of more feasibility studies.

The preliminary study estimated full build-out construction costs at $845 million, with indirect costs of $218 million and a 20% contingency estimate that yielded an all-in capital investment of $1.27 billion.

Here’s how the mechanics would work:

A network of 21 brine wells would be completed in the Smackover Formation, supplying about 7,500 gallons per minute. Twenty-two injection wells will keep up water pressure in the Smackover aquifer to assure long-term production. Brine from the supply wells will travel to the lithium extraction facility through underground fiberglass pipelines.

The company will process the brine through a lithium selective sorption process developed by Koch Technology Solutions, a subsidiary of Koch Industries of Wichita, Kansas. Several Koch entities have played key roles in Standard’s project.

After the lithium is extracted, the brine will be pumped back into the Smackover aquifer. After the lithium product is purified and concentrated, it will be converted into the final lithium hydroxide product through electrolysis.

Though Standard has its own proprietary lithium extraction technology, it has a joint development agreement with Koch Technology Solutions that gives it regional exclusivity for the Koch process, which might prove more competitive commercially.

Standard has been using the KTS extraction process at its El Dorado demonstration plant since October, and has achieved 95% efficiency rate in consistent lithium extraction and a 99% rate of efficiently rejecting contaminants, the preliminary feasibility study found.

The companies that worked on the preliminary study include Hunt Guillot & Associates of Ruston, Louisiana, an engineering and construction firm; William M. Cobb & Associates of Dallas, a reservoir engineering and geological services company; and Alliance Technical Group of Decatur, Alabama, an environmental support group for major projects. Alliance has a core location in Bryant.

Engineers Marek Dworzanowski and Frank Gay also helped in the study. Dworzanowski, based in Trejouls, France, is a metallurgical engineer and expert in brine processing. Gay is vice president and executive project director at Hunt, Guillot.

Growing Industry

Standard Lithium was the pioneer in Arkansas Lithium extraction, but other companies also see vast potential in the Smackover brine. Both Lanxess, of Cologne, Germany, and Albemarle of Charlotte, North Carolina, have been mining bromine in south Arkansas for decades. Lanxess has a cooperation agreement with Standard, and Albemarle announced a $540 million investment last year for two bromine facilities in Magnolia. It is also exploring lithium possibilities in the region.

The Wall Street Journal reported in May that Exxon Mobil of Houston had bought mineral rights leases on 120,000 acres in south Arkansas from Galvanic Energy of Oklahoma City, which had obtained the leases in Lafayette and Columbia counties.

Galvanic President and CEO Brent Wilson told Arkansas Business that his company searched all over the United States for four years, and “Smackover was the brightest of all the prospects.”

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