Standard Lithium Nears Final Approvals for Major Arkansas Project

Standard Lithium CA8536061010

The development of a significant lithium extraction facility in Arkansas is progressing toward a final investment decision, with Standard Lithium and its partner Equinor securing key financial and regulatory approvals. The joint venture, Smackover Lithium, is advancing plans for a $1.45 billion first-phase project, with over $1 billion in potential debt financing already indicated.

Financial backing for the South West Arkansas project is being assembled from multiple sources. In a pivotal move, three major export credit agencies expressed interest in December 2025. The US Export-Import Bank and Export Finance Norway are among those considering providing more than $1 billion in senior secured project debt.

The total capital structure is outlined as follows:
* A $225 million grant from the US Department of Energy, finalized in January 2025.
* Up to $1.1 billion in project debt from credit agencies and commercial banks.
* Direct equity contributions from the joint venture partners, Standard Lithium (55%) and Norway's Equinor (45%).

Regulatory Clearances Secured

The venture successfully navigated Arkansas's regulatory landscape throughout 2025. Unanimous approval from the Arkansas Oil and Gas Commission in April granted the right to establish brine production across 20,854 acres. By June, a royalty rate of 2.5% for lithium production was established, followed by the project's final regulatory clearance in October.

Further underscoring its strategic importance, the US government designated the initiative as a priority critical minerals project in April 2025, aligning with broader efforts to secure domestic supply chains.

Project Economics and Timeline

According to a feasibility study released in September 2025, the facility is designed to produce 22,500 tonnes of battery-grade lithium carbonate annually over a minimum operational life of 20 years. Estimated operating costs average $4,516 per tonne.

The study forecasts a pre-tax unlevered net present value of $1.7 billion and an internal rate of return of 20.2%, based on a long-term lithium carbonate price assumption of $22,400 per tonne.

Three critical milestones remain before construction can commence: the final investment decision from the joint venture partners, binding offtake agreements with strategic customers, and the issuance of final construction permits. Management indicated at the Citi Basic Materials Conference in December that announcements regarding financing commitments and customer agreements could be imminent.

The current schedule targets the start of construction for 2026, with first commercial production anticipated in 2028.

Market Context

The project's advancement coincides with a recovery in lithium markets. From mid-2025 to the end of December, lithium carbonate prices on the Guangzhou Futures Exchange surged by 130%. Market analysts project global demand growth of between 17% and 30% for 2026, driven significantly by the energy storage sector.

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