Stardust Power to build lithium refinery in Oklahoma, US: CEO | Hotter Commodities

Stardust Power Inc is to build a battery-grade lithium refinery in Oklahoma in the United States, with major construction starting later in 2024, the US-based company’s founder and chief executive officer told Fastmarkets

The lithium refinery, which will be located in the Southside Industrial Park in Muskogee, will focus on the use of lithium brines for its feedstock, Roshan Pujari said on Thursday, January 11.

“We’re building a large, centrally located refinery optimized for multiple sources of brine input. We’re focused on brine over hard rock because brine is more sustainable, has a lower carbon footprint and is easier to permit in the US,” he said in an interview.

Pujari noted that the US has many available sources of lithium brine, particularly given the country’s strong oil and gas industry, where brines are already in production via hydraulic fracturing.

The company will use direct lithium extraction (DLE) technology, Pujari said, using its attributes to create a sustainable product.

“We match technology with the composition of the brine, so it’s hard to pick one DLE technology that suits everything. As a result, we work with preferred vendors based on the application of their technology to the specific brine,” he added.

The company plans to have a diversified pipeline of brine sources for the refinery, Pujari said.

“We are working with oil and gas producers, as well as lithium asset developers, and we’re also investing in developing assets ourselves. As we continue to move forward, we can vertically integrate,” he noted.

“These sources are in the US and Canada, although [Stardust Power] would consider a higher grade or technical grade from Argentina if needed. But we’re really focused on North American sources and, most importantly, Inflation Reduction Act-compliant sources,” he added.

The company is expected to be eligible to receive up to $257 million in state and federal economic incentives for the facility build-out. Stardust Power may also be eligible for further federal grants and or incentives offered by the Department of Energy and the Department of Defense, Pujari noted.

“Legislation like the IRA is jump-starting the creation of a resilient American supply chain,” he added.

Stardust Power selected the site in Oklahoma because of the state’s central US location, facilitating the delivery of lithium inputs and shipments of battery-grade lithium products over multiple transportation routes to support the company’s refining operations.

The area’s intermodal freight transport options, as well as a highly skilled workforce trained in oil and gas engineering, were other key factors, Pujari noted.

Additionally, Oklahoma is recognized as an emerging national leader in sustainable power, including solar and wind, supporting Stardust Power’s commitment to limit its carbon footprint, he said.

Capacity shortfall

The rationale for the move into lithium refining dovetailed with the company’s recognition that the lack of domestic US lithium production used to build batteries for electric vehicles (EV) was creating a bottleneck, Pujari told Fastmarkets.

According to Pujari, while demand for lithium-ion batteries continues to increase, the need for a diversified supply of lithium becomes increasingly important. The company determined that the critical gap in the battery materials supply chain was lithium refining, which is dominated by China, Pujari noted.

Fastmarkets data indicates that China had a 66% market share of refined lithium in 2023, a figure that is expected to remain relatively steady at 59% by 2033 despite capacity growth in the rest of the world. The US produced just 53,000 tonnes of refined lithium in 2033, versus demand of 637,000 tonnes, Fastmarkets estimates.

Jordan Roberts, Fastmarkets’ battery raw materials analyst, noted that even with the capacity announcements from both integrated and non-integrated refineries in the US, there is likely to be a shortfall in domestic processing capacity in the long term. This is due to the difficulty in bringing projects online, especially those that include raw material extraction and typically face permitting difficulties, he said.

Developing lithium refinery capacity in the US will also support the growth of the domestic EV industry, Pujari told Fastmarkets. To this end, Stardust Power is focused on supplying EV manufacturers, specifically automakers.

“We’re in advanced discussions with multiple manufacturers, and it’s all about finding the right partner, not the biggest check. This could mean a stake, pre-payment, or something else; we’re open to options depending on who is the right long-term fit,” he said.

“Capital isn’t the biggest consideration; it’s culture and strategic partnership,” he added.

The company expects to break ground on the facility in the coming months and aims to start major construction work by the end of the year.

In Hotter Commodities, special correspondent Andrea Hotter covers some of the biggest stories impacting the natural resources sector. Sign up today to receive Andrea’s content as it is published.

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