Canadians Set to Extract Arkansas Lithium From Saltwater Sea

Canadian company Standard Lithium Ltd. set to extract battery-grade lithium from a saltwater sea beneath south Arkansas.

By KYLE MASSEY, Arkansas Business

LITTLE ROCK, Ark. (AP) — Robert Mintak's pipe dream is now in the pipeline.

The Canadian's company, Standard Lithium Ltd., broke ground last week on a pilot plant in El Dorado, a key step toward a unique vision of pulling battery-grade lithium from a saltwater sea beneath south Arkansas.

The plant will test a proprietary extraction technique bolting onto the region's existing brine industry infrastructure, isolating lithium carbonate for use in electric cars, cellphones and renewable-energy storage systems.

"The buildout schedule, if we can maintain it, is a fast track to production," the Vancouver-based CEO told Arkansas Business last week. "We've 90% completed the pilot plant, demonstrated the resource and met our economic threshold, so the key is to demonstrate that the process recovers lithium and that the operating costs are in line based on the results of real-world testing."

The company expects to ship its Canadian-built demonstration plant to Arkansas in segments sometime in July. The modules will be attached to pipes carrying byproduct water from a bromine facility owned by Lanxess, Standard's partner in the lithium project. Lanxess, the global chemical giant based in Cologne, Germany, extracts bromine — an ingredient in fire retardants — from the brine.

Zeton Inc. of Burlington, Ontario, which makes pilot plants for petroleum and chemical companies, built Standard Lithium's demonstration facility. "It's right in their wheelhouse," Mintak said. The plant "uses a solid sorbent material" to selectively extract lithium from brine that Lanxess has already stripped of salt and bromine.

The groundbreaking followed a positive late-June report on lithium concentration in the Smackover brine stream, an underground ocean that provides 40 million cubic meters of mineral-rich water a year for bromine operations, which inject used water back underground, according to the Arkansas Oil & Gas Commission.

"The size of the resource increased for the Lanxess project," Mintak recently said before boarding a plane to Germany.

"We're one level of confidence higher on the resource numbers, and our operating costs were attractive. As for the demonstration plant, it should be completed in three weeks."

Mintak planned a trip to Zeton's headquarters near Toronto in mid-July to see final progress before the 80-foot-by-80-foot, 33-foot-tall plant is disassembled. "We'll be starting to ship it to Arkansas in the third or fourth week of July," he said. "It will be assembled, tested and commissioned on an October-November timeline."

Mintak said South Arkansas was the only place in the world fit for testing Standard's process, the domain of Standard Lithium President and COO Andy Robinson.

He said in a company statement that Standard's "disciplined development strategy" is paying off. "We are separating ourselves from our peers by partnering with a global chemical company with real operational experience, deploying demonstration-scale proof-of-concept technology at an operating brine-processing plant, and removing financing and off-take risks through our joint venture strategy. Groundbreaking at the site is a key step in realizing our rapid development timelines."

Milam Construction of El Dorado is general contractor for the one-acre plant site, said Ross Lewis, Standard Lithium's senior site manager. "The main pilot plant will be 80 feet by 80 feet, and there will be paving around it and an office control room, basically a double-wide, 24 by 28 feet." An onsite lab trailer is also in the mix.

The site is being leveled and graded for foundations and concrete slabs that will house the industrial-scale demonstration plant. Hunt Guillot & Associates LLC of Ruston, Louisiana, which handled all the civil engineering and utility connection work, is overseeing the on-site project. HGA will also supervise installing and connecting the modular demonstration plant.

Standard Lithium has hired Bruce Seitz as plant manager, and a news release from the company said he would oversee "all enabling and installation work." The company expects the pilot plant to be commissioned in October or November.

Demand for lithium is growing with the electric car market, and the U.S. government has listed the element as a mineral critical to national security, Mintak said.

"Breaking ground at our El Dorado site represents a major achievement," Mintak said, mentioning lithium's rising profile in national security circles. "We anticipate our project and progress will be keenly watched as lithium has taken on significant political interest with the White House 2017 executive order and subsequent pending legislation aimed to boost domestic supplies of critical minerals."

Lanxess CEO Matthias Zachert discussed the lithium project in a conference call after his company's quarterly statement in May, as well as in a keynote speech to investors. "The project is doing well," he told listeners to the conference call. "Everything that we are seeing right now is running according to plan. It's important to look at the extraction results, and so far as the pilot plant is concerned we think this will be up and running, but then of course the purification grades of lithium are important. They determine eventually the price you can get in the market."

He said Lanxess will continue to update shareholders on the project's progress.

Local officials also cheered.

"Southwest Arkansas has a brine reservoir, we've got low-cost power, a workforce already in place," said Bill Luther, president and CEO of the El Dorado-Union County Chamber of Commerce. "That's what attracted them here."

Arkansas House Speaker Matthew Shepherd of El Dorado and state Land Commissioner Tommy Land pledged support for the project in a conference call with Standard Lithium's principals a month ago, Luther said, noting that beyond batteries and pharmaceuticals, lithium carbonate is used in making glass and ceramics.

"When commercial production begins, I envision downstream users of lithium carbonate being recruited to our state and locating in our area," Luther continued. "Standard Lithium is going all around the world communicating what they're doing, and Silicon Valley is very much aware of this project and its location in Arkansas."

For years after oil was discovered in the Smackover Formation a century ago, brine was a bothersome byproduct. Then chemists discovered bromine in the brine, and the industry now employs close to 1,000 Arkansans. For decades, the state produced all bromine in the U.S., an industry now worth some $800 million a year. Bromine is "the leading mineral commodity, in terms of value, produced in Arkansas," the Arkansas Geological Survey said.

"Arkansas has cheap electricity," Mintak said in an interview last year, "much cheaper than in alternative sites like Chile or the high Andes of Argentina. There are also minimal permitting risks in Arkansas, which we see as a great state for doing business, and the only place that we could make this project work."

In last week's conversation, Mintak said Standard Lithium is striking while lithium is hot. "This wasn't a decade from start to groundbreaking," he said. "We've done all of this in under two years."

McKinsey & Co., a New York consultancy, expects more carmakers to put lithium-ion batteries in electric vehicles, a prospect that could increase the lithium market fivefold by 2030. Projects like the El Dorado plant will be needed to meet that demand, the report said.

"The critical minerals deficit in the United States is being addressed by legislation proposed now," Mintak said, predicting long-term strength in lithium demand. "This is likely the most environmentally friendly lithium production plant you could have, in essence bolting on to existing infrastructure. It's a good fit for the renewable space, and for Lanxess it's another value added to an existing industry."

A mix of teams from Lanxess and Standard Lithium will optimize the pilot plant, Mintak said. "Arkansas is absolutely the best place to work," he said. "We've been blown away at every step by the area, the state's business approach and its excellent supply of highly skilled people."

 

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Replies to This Discussion

TWG is sending out brine leases to Columbia County residents. The leases include a section which states they will not pay for any products extracted from the brine.  The lease  specifically states that "No royalty or payment other than the payment provided in #4, shall be payable by Lessee to Lessor with respect to brine produced or removed from the leased premises or with respect to any product, products, or minerals extracted from such brine by Lessee."   My reading of that would preclude any payment for lithium or any other product extracted from the brine.  

Ark. Code Ann. § 15-76-315(c)(1) identifies the duty of a brine producer to make royalty payments to brine owners for additional substances extracted from brine.   So be wary.

Thanks for the warning and the lease, Polly.

here is the lease

Attachments:

I got a letter from TWG.

1- Should I use the lease they offer? They offer $10 per acre, paid-up for the first 5 years or $25 per acres, paid up for the first 7 years.

Section 8, T-18-S, R-22-W, E/2 of SW/4 of SE/4

2- Is that a fair offer?

3- Should it include depth limits?

Thanks!

Kathy

I had other reservations about this lease.  Do you own the surface? 

We will lease only the minerals specifically described.  Our land is a pine plantation and the surface is not for rent aside from roads for ingress and egress and a pipeline servicing a well ON THIS PROPERTY which must be buried below plow depth

Number 11 lists only damages to timber and crops. If there is a brine leak, the soil can be possibly damaged for decades. Remediation which is expensive must be included or a lump sum for the land no longer usable. The rental fee needs an inflation component  In regards to a lump sum payment they offered to pay  1.5 x appraised value.

We do not warrant title and we require a statement holding us harmless for any and all loss, liability etc.

In its conclusion to the November 2018 meeting the commission stated the following

5. That any arguments regarding royalties potentially due during the Pilot Plant testing period and the commercial viability of the production of Lithium from tail brine shall be reserved for any future hearing.

the order is Order No. 057-218-10 and the URL for the AOGC lithium meeting  is the following:

  http://www.aogc.state.ar.us/lithium/default.aspx

There was NO offer to remove the part we would not be paid for other products extracted so we did not lease.

For any mineral owners considering a brine lease who would like professional assistance, I recommend  Randy Davidson, Davidson & Summers, APLC in Shreveport.  The firm is qualified to practice in Arkansas and is currently working on brine lease reviews for multiple clients.  318-424-4342

Thanks Skip for passing that along!!

~Kathy

Thanks Polly! I own a small percentage of the mineral rights. I believe one of my relatives may still own the land. It seems like a small amount for the length of time they request to lease it.  I imagine most of my relatives will not think twice to lease without checking to see if it's a fair offer. I have no idea if it is or not. 

It sounds like a smart decision on your part to not lease unless they will include wording that that will be responsible their actions if it was to decrease for the value of your land.

I will not lease if the lease does not say that I will be paid for the lithium if it is proven to be commercially viable and royalties are required by the Arkansas Oil and Gas Commission.  Of course, this means that if I do not lease now, and it is not proven to be commercially viable, I lose this lease money.   In the Union county discussions, someone was just offered $100/acre for an oil and gas lease. This lease gives them the rights to oil and gas if they find it while seeking the brine.  In effect, they have leased the brine, oil and gas and possibly lithium for a pittance.

As we always say,  the money is in the royalty.  The bonus per acre is a lease term of much lesser importance unless someone is dealing with a large acreage and has a need for quick cash.  As long as this brine play is largely unproven, as to economic locations, and there is no competition for leases, expect bonus offers to be $100 to $200/acre.  Delaying a decision to lease is always an option.  For most, losing say $1000 in bonus money wouldn't be the end of the world.  If delay results in a proven, economic brine play, lease offers will improve somewhat depending on specifics unknowable at this point.  Long after a bonus is spent and gone, royalty revenue remains.  And lessors will take comfort in knowing that they did all they could to get fair and beneficial terms for the rest of the lease contract.

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