US lithium market needs investment, despite price slump: Standard Lithium CEO

“The current prices aren’t sustainable for future production. You see that with existing producers reducing capital exposure or turning off expansion programs,” chief executive officer and director Robert Mintak told Fastmarkets last week.

“Long-term demand is going to continue to grow, and pricing needs to return to a position where projects can be funded,” Mintak added.

At least four to five new lithium projects must be built every year to meet the projected 2-3 million tonnes of lithium carbonate equivalent (LCE) needed by 2030, Mintak said. Not to mention it is “extremely challenging” to build lithium projects in North America, he added.

Spot lithium hydroxide and carbonate prices in the CIF China, Japan and South Korea (CJK) market narrowed upward on Monday March 11, following the recent lithium price rally in China’s domestic market. This marked the first uptick in Fastmarkets’ benchmark prices in months.

Talk to us about our market-reflective lithium prices, data and analysis. Get in touch.

Standard Lithium – a Vancouver-based, “near commercial” direct lithium extraction (DLE) producer – announced in its latest quarterly earnings report in February that it has:

• concluded its drilling program in east Texas, showing the “highest-ever reported” lithium brine values in North America;
• secured lithium brine production rights on its South West Arkansas (SWA) project by exercising its option with Tetra Technologies; and
• filed its Phase 1A feasibility study for its first commercial lithium project in El Dorado, Arkansas, in partnership with German specialty chemicals producer Lanxess and engaged with Citi for financing of the project.

On March 13, the company announced that it successfully installed a commercial-scale DLE column at its demonstration plant near El Dorado, with commissioning expected later this month.

“Our team has been successfully running the LiPRO [Lithium Selective Sorption] technology since October 2022, and we have already successfully completed scale-ups of the DLE equipment at the demonstration plant; this is our final stage of derisking the technology,” Standard Lithium director, president and chief operations officer Andy Robinson said in the announcement.

“Our projects can be economic even in this environment, but with pricing where it is today, we’re seeing multiple impacts because of the current focus on Chinese spot pricing, which isn’t completely related… and impacts not just the economics, but broader interest in the lithium space,” Mintak told Fastmarkets.

Fastmarkets plans to split its existing price assessments for Europe/US lithium spot battery-grade and technical-grade lithium hydroxide and carbonate into two separate regions for Europe and US/Canada, beginning in April.

The change will capture evolving battery supply chain dynamics in each region, arising from the US’ enactment of the Inflation Reduction Act (IRA) and the EU’s Critical Raw Materials Act.

The IRA changed interest in lithium sourcing “literally overnight” and was “extremely beneficial” for lithium project developers in the US, Mintak noted.

In terms of the company’s projects, the SWA project will initially produce chloride and process it into hydroxide – though it has the capacity to process the chloride into carbonate as well, according to Mintak. Standard Lithium has seen increased inquiries for chloride directly, he said.

“There is no current market for [chloride], but we have been getting inquiries from groups interested in optimizing the infrastructure so they can take feed from South America and convert it in North America,” he said.

“For lithium metal, not chemicals, domestic lithium metal producers – all pilot-scale right now – would prefer lithium chloride as their starting point,” he added.

For its El Dorado project, Lanxess will supply Standard Lithium with the brine required for extraction of lithium and will lease a plot of land to the company for a production facility and provide certain infrastructure services, according to an announcement from both companies in December.

“We’re working through a series of agreements with Lanxess now – primarily the brine supply disposal agreement, the commercial site location and certain infrastructure tie-ins,” Mintak said during the company’s second-quarter earnings call on February 12. “Those discussions and negotiations are under way, and we’re making good progress.”

Standard Lithium also recently appointed Salah Gamoudi as chief financial officer and Michael Barman as chief development officer to lead the company’s next stage of development and growth, the company said in the earnings release.

Keep up to date with the latest lithium prices, data and forecasts on our dedicated lithium price page.