Key Takeaways:
Smackover Lithium signed a binding take-or-pay offtake to supply LG Energy Solution 8,000 metric tonnes of battery-quality lithium carbonate a year over 10 years.
"We have now secured a vast majority of the offtake agreements needed to move forward with our Project financing plans and a Final Investment Decision," David Park, chief executive officer of Standard Lithium, said.
The agreement, announced Aug. 31, covers the South West Arkansas Project, a 55-45 joint venture between Standard Lithium and Equinor. Combined with a Trafigura contract for 8,000 tonnes a year signed in March, roughly 90 percent of the targeted offtake volume is now committed against the project's 22,500-tonne annual nameplate capacity.
The deal is central to the project's financing. Smackover Lithium reported indications of interest for more than $1 billion in project debt from three export credit agencies in December, and the partnership targets a final investment decision this year, with first production of battery-quality lithium carbonate planned for 2029.
For LG Energy Solution, the contract secures a key cathode material that meets non-PFE requirements for its U.S. battery plants. The Korean battery maker operates seven production facilities in the United States, including three standalone sites, most with capacity for lithium iron phosphate chemistry. The deal completes a fully integrated local supply chain from sourcing to production, the company said.
Smackover Lithium will produce the carbonate using a direct lithium extraction and purification process, a method the partnership says offers a more sustainable supply of the battery metal. Standard Lithium shares rose 9.2 percent in early trading Monday after the announcement.
The offtake process runs alongside the project's financing. The three export credit agencies are well into due diligence, and the partnership expects to sign one additional smaller offtake agreement shortly. Standard Lithium owns 55 percent of the venture and operates the project, while Equinor holds the remaining 45 percent.
The SWA Project sits in the Smackover Formation, a lithium brine asset spanning Arkansas and Texas. Standard Lithium also advances the Franklin project in East Texas, which it describes as the highest-grade lithium brine project in North America. The company trades on the TSX Venture Exchange and NYSE American under the symbol SLI.
This article is for informational purposes only and does not constitute investment advice.
