Standard Lithium receives colossal federal grant to develop South Arkansas project

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Standard Lithium received a $225 million conditional award from the United States Department of Energy to build out its South Arkansas lithium extraction project.

The massive capital investment by the federal government comes from funding passed in the Bipartisan Infrastructure Law of 2022, which aimed to provide funding to secure a domestic supply chain of “critical minerals” like lithium. The grant is provisional, and Standard Lithium will continue negotiations with the DOE to secure the funding.

“The significant cost share from the U.S. Government demonstrates their continued support for investing in secure and sustainable supply chains of domestic lithium production. This decision by the Department of Energy validates the caliber of the project we are building through our de-risked approach to project development, strong partnerships, methodical testing, and purpose-built processes tailored to meet the specific demands of large-scale lithium production in the Smackover Formation,” Chief Executive Officer David Park said in a press release. “Moreover, it reflects the incredibly talented and dedicated team we have built to execute this vision, and most importantly the relationships we have built in our community and across the state to ensure this is a win for Arkansas.”

In the press release, Standard Lithium said the funding would go toward construction of a central processing facility that could produce 22,500 tons of battery-quality lithium carbonate. All four of Arkansas’ Republican congressmen and both Republican senators voted against the Bipartisan Infrastructure Law.

The company plans to locate its operations on a 118-acre property in Lafayette County and to create up to 400 jobs.

The federal investment comes after Standard Lithium’s stock prices have dropped all year, and critics like Hindenburg Research, a firm specializing in financial research, have cast doubts on the project. After the announcement of the award, Standard Lithium stock began to tick up again.

Standard Lithium and other lithium companies in South Arkansas intend to use a technology called Direct Lithium Extraction (DLE) to extract lithium from saltwater brine in the Smackover formation. The technology has never been used on a commercial scale before.

Lithium is a key mineral in electric vehicle batteries, and the DOE expects the worldwide lithium battery market to grow by a factor of 5 to 10 by 2030. But in order for Standard Lithium and other would-be lithium extractors like ExxonMobil and Albemarle to begin profitable extraction, a royalty to compensate landowners will need to be established by the Oil and Gas Commission.

As Arkansas Times reported, the lithium companies and landowners are in a prolonged struggle over establishing royalty rates for landowners who lease their mineral rights to the companies.

Arkansas Times reached out to Standard Lithium for comment on ongoing negotiations for the grant.

This story may be updated.

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