With One Royalty Approved, ExxonMobil Proposes Its Own
This Week: ExxonMobil Files Its Royalty Application; What’s Next for the Reynolds Unit
Standard Lithium’s Jesse Edmondson breaks down what the 2.5% royalty means for Arkansas — and why delays could have sent investors running to Texas
ExxonMobil submits its own royalty application for the Pine Unit, citing the Reynolds decision as “fair and equitable” precedent.
Let’s dive in!
Interview: Jesse Edmondson of Standard Lithium on the Royalty Rate Approval and What’s Next
With the Arkansas Oil & Gas Commission having approved its royalty application last week, Arkansas lithium pioneer Standard Lithium Ltd. and its Norwegian partner Equinor are ready to take the next steps toward construction of a $1.5 billion lithium extraction facility in Lafayette County.
In an interview with Lithium Link recorded just a few days after the royalty approval, Jesse Edmondson, Standard Lithium’s director of government affairs, says the long-awaited royalty approval is a turning point for a project that could make Arkansas a leader in U.S. lithium production — and help the U.S. compete with China.
“It was a huge day last week... Having that certainty for how things will look going forward is really important for a project of our size…,” he said.
“We think it landed in the right spot. It's the right balance between fair for mineral owners... but also for industry... I think all sides seemed to be fairly pleased with where it landed.”
What Happened
At a meeting that lasted more than four hours on May 28 in Magnolia, commissioners unanimously approved the royalty structure for Standard Lithium’s Reynolds Brine Production Unit, which encompasses more than 20,000 acres near Lewisville.
The application was filed by Standard and Equinor’s SWA Lithium joint venture. The details:
Approved Rate: 2.5% royalty for mineral rights holders, in addition to a brine fee already established by law.
Previous Proposals: The commission rejected two prior offers from Standard Lithium, including a 1.82% rate that was deemed not “fair and equitable” under state law.
Tied to Market Index: The 2.5% royalty is indexed to current market prices for battery-quality lithium products, making it responsive to pricing fluctuations.
Commission’s Justification: Commissioner Charles Wohlford described the rate as “fair, consistent, and competitive,” and emphasized its alignment with market standards.
From the Department
In a statement, Arkansas Department of Energy and Environment Secretary Shane Khoury called the commission’s approval “a huge step forward”:
“Lithium brine extraction in Arkansas is unique — it enables Arkansas to unleash its energy and critical mineral potential in a way that results in minimal surface impact to the Natural State,” Khoury said.
“The Commission’s approval of SWA’s proposal as fair and equitable compensation signifies a huge step forward for Arkansas’s lithium industry.”
Go deeper: Read Smackover Lithium’s complete application document for the Reynolds Brine Production Unit (Exhibit B).
More: Read/watch news coverage of the rate decision from Arkansas Business, THV 11 News, Arkansas Democrat-Gazette, Arkansas Advocate, Arkansas Times and Talk Business & Politics.
More Video: State Sen. Steve Crowell, R-Magnolia, talks with Steve Barnes on “Arkansas Week” about the emerging lithium industry and its potential economic impact in south Arkansas and beyond.
Edmondson: Arkansas Must Capitalize on ‘First-Mover’ Advantage
In our interview, Edmondson said it was important that Arkansas avoid further delays in setting a royalty to capitalize on its first-mover advantage. He warned that delays could push investors toward Texas, where lithium concentrations may be higher.
“The last thing I want as an Arkansan is for us to drag our feet and all the financiers are looking at these projects and saying, ‘You know what, let’s just hold out for Texas. That might be the best project yet.”
Edmondson also discussed the need for the U.S. to compete with China in sourcing critical minerals, like lithium.
“So I'm calling you from D.C. today, you know — critical minerals is about the only thing it seems like that actually both sides of the aisle agree on,” he said.
“We know if we can get built that we can be competitive… But at the same time, when you look at China and you look at the tactics that they… they continue to subsidize their industry at kind of alarming rates to us. So not only were they way ahead, but they continue to outinvest us.”
“When we know that our competition's China… if you're going to play the game, you gotta come armed for bear.”
What’s Next
With the royalty hurdle cleared, Edmondson said:
Standard Lithium aims to finalize feasibility and engineering studies this summer.
The company will then work on offtake agreements and financing while looking to start construction in early 2026 and production by 2028.
The project could create 300 construction jobs and 100 full-time operational roles — and even more indirect jobs.
An Incredible Journey
Edmondson, an Arkansas native and University of Arkansas graduate, also discussed the opportunity the state has to be at the forefront of the domestic critical mineral supply. It’s something he would not have imagined just a few years ago:
“If you would have looked at Arkansas potentially becoming the first new domestic lithium production in the United States five to 10 years ago, people would have thought you were crazy.”
“So it's really cool for me to be an Arkansas native, somebody that graduated from the University of Arkansas Geology Department and being a big critical minerals fan.”
“I've been in the critical minerals industry since 2012. And to see all of this transpire, and the fact that my home state that I love is about to potentially really plant the flag as the first lithium producer — one of the first new — was really huge for me.”
Scaling the Summit
Edmondson also plugged the next Arkansas Lithium Innovation Summit, which is set for Oct. 28-29 in Little Rock.
Edmondson, who conceptualized last year’s inaugural summit and is working on the follow-up, teased that this year’s will be “bigger, better, more beautiful than last time.”
Next Up: ExxonMobil Files Its Own Royalty Rate
Just a few days after the Arkansas Oil & Gas Commission approved the royalty rate for the Reynolds Brine Unit, the Arkansas Advocate reported that ExxonMobil’s lithium subsidiary, Saltwerx, applied for a 2.5% royalty rate for its 56,245-acre Pine Unit in South Arkansas.
In its application, Saltwerx cited the commission’s Reynolds Unit royalty approval as a “consistent, fair and equitable precedent.”
The next commission hearings on the calendar: a special meeting on June 23 in Magnolia, with a follow-up regular meeting on June 24 in El Dorado.
What Exxon Is Saying
Company spokesperson Margot Armentor told the Arkansas Advocate in an email that Exxon was “encouraged” by the SWA Lithium royalty decision and cited the “established precedent.”
“The goal is a clear, consistent, globally competitive royalty structure, which will be essential for the state’s emerging lithium industry,” Armentor wrote.
“Getting this right benefits everyone — a thriving lithium industry would benefit mineral owners, the state’s economy, the surrounding region, local communities and bring new jobs to Southwest Arkansas.”
