Smackover Lithium Reaches First Offtake Agreement for SWA Project
Smackover Lithium, the joint venture between Standard Lithium Ltd. of Vancouver and Equinor of Stavanger, Norway, announced this week that it has signed its first offtake agreement for lithium to be extracted from its planned $1.5 billion commercial plant in Lafayette County.
The agreement, with Trafigura Trading LLC of Houston, would supply the commodities trader with 8,000 metric tonnes per year of battery-quality lithium carbonate over a 10-year period.
The companies did not disclose financial terms of the deal.
The Smackover Lithium JV aims to reach a final investment decision on the plant — its South West Arkansas Project — this year; production would begin in 2028.
A Milestone
In a statement, Standard Lithium CEO David Park called the deal a “major milestone” and said it was the “culmination of months of collaboration and negotiation.” Gonzalo De Olazaval, Trafigura’s head of metals and minerals, said the agreement will further strengthen its critical minerals footprint in North America and will “provide a reliable source of battery-grade lithium carbonate produced in the United States, enhancing domestic supply chains.”
Securing offtake agreements are key to Smackover Lithium’s final decision to invest in the plant, which aims to produce 22,500 tonnes of lithium carbonate per year.
The JV aims to ink offtake agreements for roughly 80% of that capacity.
In its news release, Smackover Lithium said it is in “advanced commercial negotiations with multiple additional parties with the aim to complete this process as soon as practical.”
What’s Next
Smackover Lithium is scheduled to update investors on its progress toward a final investment decision for the South West Arkansas Project during its fourth-quarter earnings call, scheduled for March 30.
More:Arkansas Business, Reuters, Magnolia Reporter and Mining.com report on the offtake agreement.
