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

This is not new news as it has been in the works for months with several news releases.  If the pilot plant works as planned then a larger plant wil be built.  Some of the news releases have reported intent to lease brine acreage west of Columbia County. To start with, they will be extracting from tail water at the Lanxess South plant just off Highway 167 south of El Dorado.  

Yes, I have posted articles on the specific subject previously but thought it was worth a re-visit for members in the area where brine production has proven economic.  If the new facility is a success it may spawn a new round of leasing and we always like to get ahead of the land grab if possible.

Thanks for the reply.  We don't always know if AR members are still following the site.

Skip, thanks for posting this.  I've been only an occaisional lurker on GHS since the Columbia County activity died down.  But this week I got an inquiry for a seismic lease on some mineral acres I own in Section 35, TWP 18S, R 18W Union county.  The surface land was sold a few years ago but I retained minerals.

The short document is a request from Jura-Search for 12-month permission to conduct a seismic survey across the property, for the "Mountains of the Moon 3D"survey.

There is a brief paragraph stating the Permittee will hold the Permittor (me) harmless from all actions, suits, etc. that may arise from their work by virtue of my permission.  Operations will be conducted in prudent & safe manner, etc.  I think this should be sufficient to protect my interests, as I have no surface rights there to worry about.  OTOH, they will ot pay me anything for access, that will have to be haggled with the current owner.

However, the next paragraph is where the money is:  (permittor) grants to Jura-Search, Ic. an exclusive 12-month option to obtain an oil & gas lease covering any tract named above.  Primary term of 3 years, $100/acre bonus and 3/16 royalty.  Optional term two years with optional payment of $66.67 per mineral acre.  There is no mention of brine or other minerals, and practically I own less than 10 mineral acres anyway.

This was a bit interesting considering the low price of oil now, and all the interest in brine (including a recent lease I did in Columbia county).

I can't find a lot of info on Jura-Search but it seems to be a small Mississippi-based seismic firm without any complaints against it.  I'm glad to see some interest in the area and don't want to hold up my neighbors if this is all on the up-and-up.

Considering the small interest I have (and no surface), does this seem a fair contract to sign?  Or is there a way to get more out of it?

Joe Deerhunter

 

Welcome back, Joe.  We are always appreciative when lurkers pitch in.  The more on the ground info, the better members are served.  Generally speaking, offers to lease minerals are an "add on" where the seismic company can earn a few extra shekels by gaining a mineral interest or selling the lease.  There is no need for their offer to be anything other than low ball.  For your particular situation, ten acres, I'd advise against it.  If the seismic does not result in development, you are out one thousand dollars.  If the shoot does result in a client moving to drill wells, they should offer you a little better terms.  In that case I would doubt the bonus per acre offer wouldn't be significantly greater, maybe $250 or $300.  The real money is in the royalty and in making sure you have the protective and beneficial lease clauses that protect your interest.  An experienced O&G attorney familiar with AR civil and mineral law may charge you $200 to $400 to review a lease and create an Exhibit A to the lease that adds whatever terms favorable to you are warranted.  No one should however expect an experienced attorney to negotiate on their behalf for that amount.  I don't have a problem concerning a lease term of 4 years or less if the other terms are favorable.  I would expect to get a royalty fraction better than 3/16ths. from a company looking to explore and produce themselves.  Good luck.

Thanks, Skip!   I think I will contact Jura-Search back and offer to approve the seismic survey but decline (cross out) the oil lease part, particularly since they won't pay anything unless there is development.  If someone wants it, as you say, they will know where to contact the mineral owners.

I hope everyone is staying healthy on GHS.  Up in the PNW we can't even go out to hunt and fish right now.  Lucky I have lots of home projects to do!

You're welcome, Joe.  Yes, I expect a lot of DIY home projects are getting attention.  I have completed several and have one currently underway.  Off topic but something DIYers should keep in mind is that older homes may have sheetrock and paint that contains asbestos.  Unfortunately that had not dawned on me until I had already started a project which involves both.  My home was built in the early 1950s so the chances that there is asbestos in one or the other is pretty much 100%.

For any mineral owners considering a brine lease who would like professional legal 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

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