On Tuesday, April 22, 2025, two major lithium companies, Standard Lithium and Saltwerx LLC, are set to appear before the state Oil and Gas Commission in Arkansas, seeking to expand their production capacity in the region. This comes as both companies aim to tap into the vast lithium reserves located in the Smackover Formation, a geological formation that the United States Geological Survey estimates could hold between 5 million to 19 million tons of lithium.
Saltwerx, a Texas-based subsidiary of ExxonMobil, has proposed the "Pine Unit," which would cover a massive 56,245 acres across Lafayette and Miller counties. The company plans to pump lithium-rich brine from deep underground, projecting that the Pine Unit could generate $316 million in revenue and $27 million in profit before taxes each year by producing 165,000 barrels of lithium brine daily.
However, both companies face significant hurdles in their quest for approval. Last fall, Saltwerx, along with Standard Lithium and three other companies, submitted a request to the Oil and Gas Commission for a blanket royalty rate for future lithium projects. This application was unanimously rejected, with the commission siding with landowners who argued that the companies had not been financially transparent and had not offered fair royalty deals.
For Standard Lithium, which is also seeking to establish a production unit called the "Reynolds Brine Unit" covering 20,854 acres in Columbia and Lafayette counties, the path forward is equally complicated. The company has indicated a total capital investment of over $230 million, supported by a $225 million grant from the Biden administration to develop its Arkansas project. However, the South Arkansas Minerals Association (SAMA), representing numerous landowners, is opposing Standard Lithium's application, stating that the company has not provided sufficient evidence to demonstrate profitable lithium extraction.
In light of these challenges, South Arkansas University has voiced its support for the applications from Saltwerx and Standard Lithium, emphasizing the potential for educational and professional opportunities in the lithium sector. Additionally, the Southwest Arkansas Development Alliance, a regional economic development organization, has also backed Saltwerx's plans.
As the companies seek to navigate the regulatory landscape, state legislators recently passed a bill creating tax credits for lithium firms investing over $100 million in Arkansas. This bill, which received bipartisan support, was sponsored by Sen. Steve Crowell (R-Magnolia) and Rep. Matthew Shepherd (R-El Dorado), although it awaits Governor Sarah Sanders' signature.
In a broader context, the White House has moved to expedite federal permitting for Standard Lithium’s South West Arkansas Project, which has been designated as a critical mineral production initiative under Title 41 of the Fixing America’s Surface Transportation Act. This designation aims to streamline the permitting process for large infrastructure projects, including those producing key minerals like lithium, gold, and copper.
The Federal Permitting Improvement Steering Council announced that the South West Arkansas Project is among ten critical mineral production projects now receiving this expedited status. A permitting timetable for the project is anticipated to be published on or before May 2, 2025, with the U.S. Department of Energy acting as the lead federal agency.
Standard Lithium has been actively working on distilling battery-quality lithium products from Arkansas brinefields for nearly a decade, with the first phase of production expected to commence as early as 2028. However, production cannot begin until a royalty rate is established, which remains a contentious point.
Furthermore, the designation of the South West Arkansas Project as a priority transparency critical mineral project under Executive Order 14241, issued by President Trump on March 20, 2025, underscores its strategic importance in reducing the nation’s reliance on imported minerals. This initiative is part of a broader national strategy to enhance domestic mineral production capabilities.
CEO David Park of Standard Lithium expressed optimism regarding the federal backing, stating, "This designation is a testament to the project’s economic viability and potential to strengthen national security, create high-quality jobs, and fuel economic growth in Arkansas and beyond." He emphasized that the streamlined permitting process would reinforce their development timeline and help deliver a sustainable domestic source of lithium.
As the companies gear up for their upcoming hearing, the outcome will have significant implications not only for their operations but also for the future of lithium production in the United States. With lithium becoming increasingly critical for electric vehicle batteries and other technologies, the stakes are high.
In conclusion, the developments surrounding Standard Lithium and Saltwerx's applications reflect a growing interest in lithium production in Arkansas, a state poised to play a crucial role in the domestic supply chain for this essential mineral. The success of these projects could mark a pivotal moment in the U.S. effort to bolster its mineral independence and meet the rising demand for clean energy technologies.
