Smackover Lithium, a joint venture between Standard Lithium Ltd. of Vancouver and Equinor of Norway, has landed the first commercial offtake client for its South West Arkansas Project.
Commodity trading firm Trafigura Trading LLC of Houston has signed a 10-year agreement to purchase 8,000 metric tons of battery-quality lithium carbonate per year, beginning at the start of commercial production. Pricing terms are confidential, Smackover Lithium said in a news release, but are structured to support anticipated financing for the project.
Smackover Lithium is on the cusp of a final investment decision to build a $1.5 billion lithium extraction plant in Lafayette County.
The joint venture is seeking to finalize customer offtake agreements for roughly 80% of the 22,500 tons of annual nameplate lithium carbonate capacity for the initial phase of the plant.
The agreement with Trafigura, which is indirectly owned by Trafigura Group Pte. Ltd. of Singapore, represents more than 40% of the project’s targeted offtake commitments.
Smackover Lithium is in advanced commercial negotiations with “multiple additional parties,” the release said.
Lithium demand is expected to grow globally in the coming years because the lightweight metal is vital for rechargeable batteries. Lithium-ion batteries are powering a worldwide boom in electric vehicles and renewable energy storage, and are crucial in smartphones and laptops.
The Arkansas Oil & Gas Commission last May cleared the way for Smackover Lithium to begin commercial production by approving a 2.5% royalty rate.
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