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Energy majors are looking to where their resources and skills can be leveraged, and a background in the energy space offers complementary skills in lithium extraction, according to Robert Mintak, Standard Lithium’s chief executive officer, said.
“There is a significant amount of capital [energy majors] have available to deploy and they are picking projects they have the technical skills to make the most impact from. They pick projects where they will not be stranded by social license or permitting,” Mintak told Fastmarkets.
The permitting process can be challenging but, states like Arkansas and Texas have experience in mining and extractive industries permitting, according to Mintak.
Bromine has been extracted from brine in the Smackover formation in Arkansas since 1957, with permitting for both bromine extraction and reinjection of the brine back into underground managed at the state level.
Standard Lithium will be extracting lithium from the same type of wells via the direct lithium extraction (DLE) process in this region with well-established industrial permits and standards, Mintak said.
Equinor’s ability to define a resource and its experience in extraction are complementary skills that it is bringing to the partnership, according to Standard Lithium’s chief financial officer Salah Gamoudi.
“They are good at figuring out what is available underneath the ground and how to drill,” he said. “They are good in getting that resource out and transporting it via pipelines to refineries.”
The company has completed preliminary feasibility study and estimate to produce between 30,000 and 35,000 tonnes per annum of battery-quality lithium hydroxide over a 20-year operating life in their South West Arkansas project.
The definitive feasibility study is expected to be completed in 2025 and they are targeting production start in 2027, Mintak said.
Lithium resources in the area has been getting a lot of attention in the recent 12 months after the energy giant ExxonMobil acquired rights to 120,000 gross acres of the Smackover formation in early 2023, according to Mintak.
The same aquifer extends into East Texas and, with upwards of 800mg of lithium per liter of brine, Smackover is one of the highest-grade lithium brines in North America, close to the concentration found in the Atacama Salt Flat brine in Chile, Mintak added.
Standard Lithium is looking to develop these two projects with Equinor’s help and to secure land positions in East Texas, according to Mintak.
“In Texas, we are actively securing leases to develop a large footprint,” Mintak said.
The company will utilize the same DLE process in Texas that they have been working on with Koch Minerals and Trading.
Standard Lithium expects to start production in its East Texas project later in the decade.
According to the agreement announced on Wednesday, Equinor will fund the first $40 million of development costs at South West Arkansas (SWA) project and the first $20 million in exploration and development costs at the East Texas (ETX) properties. All additional capital expenditures would be funded on a pro-rata basis, according to the companies.
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