Standard Lithium is receiving increasing support from several U.S. federal institutions for its direct lithium extraction (DLE) project in Arkansas. The Canadian company aims to secure a leading position in a state rich in deep brine resources, while Exxon Mobil adjusts its own ambitions in the region.
Federal support and regulatory acceleration
The U.S. Department of Energy, Republican senators and the Federal Permitting Council have expressed their support for Standard Lithium’s industrial programme. The company received a $225mn grant for the development of its DLE process applied to the Smackover geological formation. The federal administration also placed the project on a fast-track permitting list to shorten the administrative timelines imposed on strategic energy infrastructure.
A letter from three Republican senators to the Secretary of Defense described Standard as having an operational DLE technology, while referencing the possible use of funding under the Defense Production Act. This political stance aims to secure domestic access to a mineral considered critical for the battery supply chain.
Technological shift and industrial partnerships
Standard adjusted its strategy after criticisms targeting its initial DLE process in 2022. The company now relies on an adsorbent material developed by Koch Industries, which has become its main shareholder. The project also attracted Equinor ASA, which invested in a $1.45bn partnership.
Chief Executive Officer David Park indicated that final talks are ongoing with several banks and foreign governments to secure nearly $1bn in loans. The company plans to launch commercial production in 2028 over a 30,000-acre area.
Lithium market, risks and financial projections
The decline in lithium prices has already led Exxon Mobil to postpone its own industrial timeline by at least one year. Standard expects an average price of $22,000 per tonne over the project’s lifespan, a level considered to offer significant margin given an estimated cost of $5,924 per tonne.
In 2022, a short seller triggered a sharp drop in Standard’s share price by questioning the technical reliability of its initial process. Since then, the company has modified its approach, appointed new executives and halved short positions on its stock, while receiving several buy recommendations from financial analysts.
International interests and Arkansas’ strategic role
The Smackover formation, which stretches from Texas to Florida, is estimated to contain over 5 mn tonnes of lithium according to the U.S. Geological Survey. Several export credit agencies, including Export Finance Norway, Korea Trade Insurance Corporation and Nippon Export and Investment Insurance, have been mentioned as potential financial backers of the project.
Arkansas Governor Sarah Huckabee Sanders supports the industry, stating that the progress of DLE technology is a decisive factor for lithium industrial development in the state.
