$225M Federal Grant Closes for Building Arkansas Lithium Plant

A Standard Lithium employee at its demonstration plant in El Dorado. (Madison Ogle)

Battery ingredient company Standard Lithium Ltd. secured an expected $225 million federal grant to build a commercial lithium production facility near Lewisville.

The company, based in Vancouver, British Columbia, has been working to distill battery-quality lithium products from south Arkansas brinefields for nearly 10 years.

Standard announced closure of the grant, to itself and partner Equinor of Norway, on Thursday. The money comes from the U.S. Department of Energy’s Office of Manufacturing & Energy Supply Chains. It will support the first phase of what Standard calls its South West Arkansas Project, the plant construction in Lafayette County.

David Park, Standard’s CEO and a longtime executive at Koch, the huge private company that has invested in the project, called the grant a major milestone.

“Closing of the DOE grant is a testament to the caliber of the South West Arkansas project,” Park said in a statement. “SWA is one of the highest-grade lithium brine projects in North America, and through the use of [direct lithium extraction] technology, a near-term, sustainable opportunity to help secure America’s domestic lithium supply chain.”

Standard owns 55% of the billion-dollar project; Equinor, a $600 million investor, has a 45% stake.

World Pioneer

Hege Skryseth, Equinor’s executive vice president for technology, digital and innovation, also praised the grant’s execution. 

“The U.S. Department of Energy’s support demonstrates the project’s maturity and strengthens its financial robustness as we work towards a final investment decision,” Skryseth said in a news release. “We look forward to working with Standard Lithium and alongside the local community to enhance the US lithium supply chain by deploying innovative technology.”

The Lafayette County project is racing to be one of the first commercial-scale direct lithium extraction plants in the world. Standard has been producing small batches of battery-quality lithium at pilot plants in El Dorado for several years.

The plant and its mineral leases in Columbia and Lafayette counties is projected to produce up to 45,000 tons per year of lithium carbonate. The first and second phases of development would each encompass 22,500 tons of capacity.

Construction by 2028

The project has a definitive feasibility study and front-end engineering design process underway. The partners expect a final investment decision by the end of the year. Phase 1 production could start as early as 2028, company officials said.

Grant conditions make the project subject to the National Environmental Policy Act. That will require completion of an environmental assessment that the company expects to complete this year. More information, including the opportunity for public comment and review, will be shared as the process progresses.

“We’re committed to ensuring this project is a win for the Lewisville and southwest Arkansas communities,” Park said. “For us that means adding approximately 100 direct, long-term jobs and 300 construction jobs, with a commitment to hire at least 40% of the operations workforce locally.”

He said the plant will also benefit the community in other ways. Park cited infrastructure improvements, healthcare initiatives, educational partnerships, and workforce development programs.

Another Grant Pending

The grant represents half of a $450 million federal investment in Arkansas’ lithium industry. Another project, TerraVolta’s lithium effort in the same area, received preliminary approval for a similar $225 million grant last September.

Both projects intend to pump brine to the surface from the Smackover shale formation and use new technologies to directly draw out the lithium and refine it.

The DOA named TerraVolta and Standard’s partnership, formed as SWA Lithium LLC, among 25 domestic projects earmarked for more than $3 billion in federal money. 

Foreign companies, notably China, Australia, Argentina and Chile, dominate lithium production, and China is far and away the leader in refinement, according to Robert Reynolds, chairman of the South Arkansas Minerals Association and president of Shuler Drilling Co. of El Dorado.

“Virtually all of lithium processing, whether they’re taking hard rock lithium from Australia or brine lithium from Chile and Argentina, the processing into lithium carbonate and other lithium products is done in China,” Reynolds told Arkansas Business.

Over the past five years, Arkansas and national officials have grown increasingly suspicious of China and its motives. That’s one reason the Biden administration’s infrastructure agenda supported domestic production projects. The incoming Trump administration holds an even harder-line position on China.