The Arkansas Oil and Gas Commission has approved a 2.5% royalty rate for lithium extracted from brine by Smackover Lithium, a joint venture between Standard Lithium and Equinor. The decision sets a precedent for lithium companies in the state and moves the project closer to a final investment decision.
The royalty applies to Phase 1 of Smackover Lithium’s South West Arkansas project, which is expected to produce 22,500 tonnes of battery-grade lithium carbonate annually starting in 2028. In addition to the lithium royalty, brine owners will receive a $65.05 per acre yearly fee. Overall, compensation stands at approximately 3% based on current lithium prices.
The approval is seen as a step toward economic development, ensuring fair compensation for brine owners while fostering investment in Arkansas’ vast lithium reserves. The US Geological Survey estimates that southwestern Arkansas holds 5-19 million tonnes of lithium, potentially meeting global lithium demand for electric vehicle batteries multiple times over.
Smackover Lithium aims to utilize direct lithium extraction technology to efficiently separate lithium from oilfield brines. If successful, Arkansas’ Smackover Formation could become a key lithium production hub, accelerating the state’s role in the global transition to clean energy.
