Energy Department Sends $225M to Arkansas for Lithium Work
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Standard Lithium Locks Down DOE Grant for Arkansas DLE Project
Arkansas lithium pioneer Standard Lithium Ltd. of Vancouver has officially received a $225 million federal grant to support the first phase of its lithium extraction project in South Arkansas.
The funding is part of the U.S. Department of Energy’s $3 billion effort to strengthen the domestic battery supply chain, and receipt of the grant marks significant progress for the company’s South West Arkansas project, one of two lithium initiatives the company has undertaken in Arkansas.
The company said it is targeting a final investment decision by the end of the year, “with Phase 1 production commencing as soon as 2028,” according to a report this month by the Arkansas Democrat-Gazette.
“Closing of the DOE grant is a testament to the caliber of the South West Arkansas project,” David Park, Standard Lithium's CEO and director, said in a statement. “SWA is one of the highest-grade lithium brine projects in North America, and through the use of [direct lithium extraction] technology, a near-term, sustainable opportunity to help secure America's domestic lithium supply chain.”
Company executives told investors in November that the grant, awarded in September, might be delayed amid the change in presidential administrations:
“I’ll say getting the DOE grant finalized is a high priority for both the DOE staff, as well as the Standard Lithium team,” Park said at the time. “As a practical matter, if it’s not resolved by Inauguration Day, it would likely take a couple of quarters for new people to be in their seats and to get a final answer.”
The grant is funded by the 2021 Infrastructure Investment and Jobs Act. As it turned out, Standard Lithium announced on Jan. 16 — four days before the inauguration — that the grant had been finalized.
Deal details:
Specifically, the money would support the construction of Standard’s Central Processing Facility for Phase 1 of its South West Arkansas project in Arkansas’ Smackover Formation. The company estimates Phase 1 would produce 22,500 tonnes of battery-quality lithium carbonate annually beginning in 2028:
The initiative involves DLE technology, designed to produce lithium sustainably. Norwegian energy giant Equinor co-owns the project.
The project aims to create 100 direct jobs and 300 construction positions, with at least 40% of the workforce sourced locally.
What’s next:
The project will undergo an environmental impact evaluation, expected to conclude by the end of 2025, as a grant condition under the National Environmental Policy Act.
More: Read the full Democrat-Gazette story here.
The Politics of Lithium
While Arkansas’ congressional delegation voted against the Biden administration infrastructure act that funds the DOE grant to Standard Lithium, it has been united in its support for DLE in South Arkansas.
In a statement to the Democrat-Gazette praising the award, state Sen. Steve Crowell, R-Magnolia, thanked Arkansas’ U.S. Senators and U.S. Rep. Bruce Westerman, now chairman of the House Committee on Natural Resources:
“This is an exciting initial step toward the lithium economic boom South Arkansas has been striving for,” Crowell wrote. “I extend my sincere gratitude to Congressman (Bruce) Westerman, Senators (John) Boozman and (Tom) Cotton for their instrumental role in making this a reality. The knowledge that we have the support of our allies in Washington will undoubtedly facilitate the commencement of projects and foster the necessary growth within our region of the state.”
On Jan. 15, Cotton asked President Trump’s choice to lead the Energy Department, Chris Wright, about whether Wright would commit to working with his office to develop the lithium resource in Arkansas:
“Absolutely,” Wright said (video). “This is a different lithium production technology to get it out of brines. There seems to be an enormous resource of it in Arkansas and to the south of you. I think that’s an area of critical interest to our country and should be looked at, evaluated and, if it’s commercially viable, developed.”
U.S. Sen. Tom Cotton and Chris Wright on Arkansas Lithium:
Elon Musk’s Texas Lithium Plans
Here’s a great first paragraph to a Bloomberg story this month about a $1 billion lithium project underway in Texas:
“Twenty miles outside Corpus Christi, Texas — an area so dry the local water company distributes shower timers at high school football games — the world’s richest man is nearly done building a lithium refinery that could require as much as 8 million gallons of water per day.”
That man, of course, is Tesla Inc. CEO Elon Musk, who is building a lithium refinery near Corpus Christi aiming to produce enough battery-grade lithium for about 1 million electric vehicles by this year.
The challenge: water.
The refinery is expected to require up to 8 million gallons daily, a significant concern in the drought-prone region.
As of this month, Tesla has not secured a water contract for the facility, raising questions about the project's sustainability and impact on local water resources.
The story highlights the significant amount of natural resources required to get lithium batteries into electric vehicles. And refining the resource is only one part of a complex supply chain.
Bloomberg reports that, to mitigate environmental impact, Tesla plans to use less harsh chemicals, such as soda ash, in its refining process, deviating from the conventional use of sulfuric acid.
As you would expect, Tesla’s water needs are raising concerns among the locals: “It’s just upsetting that we still give water contracts out when we’re in such dire straits,” Myra Alaniz, a Nueces County resident, said. But local officials “have made little public pushback” against the project, according to Bloomberg, which is expected to bring 250 permanent jobs with average salaries around $80,000. The current average income is less than half that.
More: Read the complete Bloomberg story here.
