Arkansas Smackover Lithium Play
As the Smackover (SMK) Lithium (Li) play picks up steam we need to acknowledge that from regulatory and legal standpoints, there will be significant differences between the play in South Arkansas and in East Texas. Very soon we expect to know more about royalty provisions and regulatory guidelines. From past experience with dissimilarities between Texas and Louisiana mineral laws and regulatory statutes governing the Haynesville Shale, we hope to limit confusion and make it easier to access the information that will be pertinent to land and mineral owners.
In order to help members and quests to the website and to avoid confusion, we will start two new discussions, one for Texas and one for Arkansas. There is an abundance of information in the original SMK Lithium discussion threads and members may want to click on them and then save them to their computer bookmarks/favorites to be able to access them in the future as they will eventually rotate off the main page. After 24 hours, comments in those discussions will be closed but the replies will remain available in the website archive. Archived discussions are available by using the search box in the upper right corner of all website pages.
GoHaynesvilleShale.com was one of the first resources for mineral owners to learn basics, share information and generally provide a place where mineral owners could become more informed managers of their mineral assets in the age of the Internet. The website is pleased to continue to provide those services to those who will benefit from the SMK Lithium Play. Please keep in mind two things. You are a key part of the on the ground intelligence network by letting your friends and neighbors know about GoHaynesvilleShale.com and encouraging them to participate in site discussions. And since GoHaynesvilleShale.com is free for all to use, please consider a donation to help keep the website online.
Sam Goodman
I don't have access to the Financial Times, but this sounds like a good article if anyone has a subscription: https://www.ft.com/content/ab1f74c5-4b07-465f-aa1f-3bf89418ba87
How the US plans to break China’s stranglehold on lithium
New technology that extracts the metal from underground brines has been compared to the shale revolution
May 25
Sam Goodman
Standard Lithium wins battle over lithium extraction royalty after Oil & Gas Commission unanimously approves proposal
by Brett Barrouquere | Updated May 28, 2025
https://www.arkansasonline.com/news/2025/may/28/standard-lithium-wi...
Mineral rights and landowners in southern Arkansas will receive a 2.5% royalty for lithium extracted from brine on their property after the Arkansas Oil and Gas Commission voted 9-0 on Wednesday to approve the payment rate.
The vote came after a four-plus hour meeting at Southern Arkansas University in Magnolia during which commissioners heard from Standard Lithium, the company planning to do the extraction, landowners hoping for a different royalty structure and a variety of business and public officials in the area.
The decision ends a multi-year dispute between the company and landowners in Columbia and Lafayette counties in what’s known as the Smackover Formation, an area stretching from east Texas through Arkansas and into the western Panhandle of Florida.
Commissioner Charles Wohlford, backed by Commissioner Jim Phillips, moved to approve the 2.5% royalty, saying tying the payment to an indexed, marketable product makes sense.
“For me personally this royalty is fair, it’s consistent and it’s competitive,” Wohlford said.
The approved rate was the third one by pitched Standard Lithium and a hike from the 1.82% payment rejected by the state last year as not meeting the law’s requirement that royalty payments be “fair and equitable.”
Landowners in southern Arkansas, led by the South Arkansas Minerals Association, sought a sliding scale royalty payment, with a floor of about 4% and rising depending upon how much the extracted lithium sells for.
Much of the hearing focused on the profitability of lithium extraction and what royalty rate would allow the company to make money on the process.
Jesse Edmonson, director of government relations for Standard Lithium, said the company is spending $1.5 billion on the project, which will create 300 construction jobs as the plant is built and another 100 permanent jobs once it opens in 2028. Edmonson said 65% of the mineral rights owners live outside Arkansas, with only 17% being in-state residents.
“No one has better royalty rates than the royalty rates in Arkansas,” Edmonson said.
Later in the hearing, Jackson Braswell, the public affairs manager with Weyerhaeuser, a timber giant that owns 1.2 million acres in Arkansas, said the company has gotten better offers to mine timberland in the state.
“This proposal would not be line with the dynamics of the market,” Braswell said.
The hearing at times got testy, with Eamon Mahoney, vice president of the South Arkansas Minerals Association, saying Standard Lithium was dragging its feet in hopes that the commission would get frustrated and approve a low royalty payment.
“If we’re dependent on Standard Lithium … to do the right thing and propose a fair and equitable rate, we’re going to be here a long time,” Mahoney said. “We are giving up something. We’re giving up a little piece of Arkansas and we’re sending it all over the place in the form of this lithium.”
Phillips replied that the commission was considering the third pitch from Standard Lithium after the two sides couldn’t reach a compromise.
“That’s what this commission wanted, for y’all to work it out. Y’all couldn’t do it,” Phillips said “I don’t want you to get the impression that we’re just going to get tired and make a decision.”
Phillips told Mahoney and representatives from Standard Lithium that more than just the desires of the mineral rights owners at the hearing and the company are taken into consideration. There are other landowners who could be impacted by the vote, he said.
“We also have to consider the people who can’t afford to be here. There’s a whole bigger picture,” Phillips said.
One landowner, speaking during the public comment part of the hearing, described Standard Lithium’s proposal as “corporate greed.”
Joshua Gaines, who said he owns 45 acres with mineral rights in southern Arkansas, said Standard Lithium wants to make a show of funding educational and training efforts in the area, but use the money made by not paying the landowners to do it.
“They want it for free. They just want to take it,” Gaines said. “The decision you all make about this lithium royalty thing will affect people like me, who wear overalls to work everyday.”
Gaines suggested commissioners reject Standard Lithium’s proposal and look to oil royalties, which have been set for decades
“So 2.5% is laughable,” Gaines said. “I’d laugh you off my property with that offer.”
Bob Honea, an attorney representing Standard Lithium at the hearing, said the company has more than 1,000 mineral rights deals in Texas with better royalty rates. Arkansas has a chance to get in early on lithium extraction, but if royalty payments are too high, it could bring a quick end to the industry, he said.
“You don’t want to kill the goose that laid the golden egg,” Honea said. “That head start is going to evaporate if we don’t move fast.”
James Rankin, the attorney for South Arkansas Minerals Association, a group of landowners in the area, noted that the two prior royalty proposals from Standard Lithium were rejected because there wasn’t enough information to justify the payment scale.
The company failed again to provide enough information, Rankin said, and it threatened to leave the state if it didn’t get approval.
“Standard Lithium is sitting before you saying give us what we want or we’ll take our toys and go to Texas,” Rankin told commissioners. “That’s not going to happen.”
Standard Lithium, working with Equinor, a Norwegian energy company, is hoping to use a process called direct lithium extraction to create lithium carbonate from the salty brine in the Smackover Formation.
The administrations of both President Donald Trump and former President Joe Biden supported Standard Lithium’s work in Arkansas, with Biden’s team giving the company a $225 million Department of Energy development grant. The Trump administration gave the work project priority development in one of his initial executive orders.
Both administrations considered lithium a “critical mineral.”
May 28
Sam Goodman
Smackover Lithium Projects: Transforming US Battery Supply Chain
Understanding the Smackover Formation Lithium Potential
The Smackover Formation stretches across parts of Arkansas, Texas, and Louisiana, representing one of North America's most promising lithium brine resources. This Jurassic-era geological formation, initially known for its oil and gas deposits, has gained significant attention for containing lithium-rich brines that can be accessed using advanced extraction technologies.
Formed approximately 150 million years ago from an ancient shallow sea, the Smackover Formation consists of limestone and dolomite layers saturated with mineral-rich brines. These naturally occurring brines contain lithium concentrations that make commercial extraction economically viable, particularly as lithium demand continues to surge for electric vehicle batteries and energy storage systems.
What Makes the Smackover Formation Unique?
The Smackover Formation offers several distinctive advantages compared to other lithium resources. Unlike the hard-rock lithium mines of Australia or the vast evaporation ponds of South America's "Lithium Triangle," Smackover's lithium exists in subsurface brines that can be accessed through wells, similar to oil and gas extraction.
This geological configuration allows for the application of Direct Lithium Extraction (DLE) technologies—advanced methods that can selectively extract lithium from brines without requiring large evaporation ponds or extensive processing. The formation's porosity and permeability characteristics make it particularly suitable for these innovative extraction approaches.
Strategic Importance to US Battery Supply Chain
The Smackover Formation represents a crucial component in America's strategy to reduce dependence on imported lithium. As of mid-2025, the United States imports more than 95% of its lithium, creating potential supply vulnerabilities for its growing electric vehicle and energy storage industries.
The region offers several strategic advantages for domestic lithium production:
According to industry experts, the Smackover Formation could potentially supply a significant percentage of U.S. lithium needs if multiple projects reach commercial scale. This would represent a major shift in the domestic battery-grade lithium refinery supply chain landscape.
Who Are the Key Players Developing Smackover Lithium Projects?
The race to develop Smackover's lithium resources has attracted major energy companies and specialized lithium developers, each bringing unique expertise to these projects. The entrance of oil and gas majors into this space signals the formation's potential significance in the critical minerals energy transition.
Standard Lithium-Equinor Joint Venture
One of the most advanced Smackover lithium initiatives is the joint venture between Standard Lithium, a lithium development company, and Equinor, the Norwegian energy major. Their partnership combines Standard Lithium's DLE technology expertise with Equinor's subsurface knowledge and project development capabilities.
The joint venture is targeting commercial production by mid-2028, with a final investment decision expected by the end of 2025. Their development approach involves a phased scaling strategy, starting with demonstration facilities before expanding to commercial-scale operations.
Lisa Rebora, Equinor's Global Head of Lithium, emphasized the complementary nature of their partnership at the 2025 Fastmarkets Lithium Conference:
David Park, Standard Lithium's CEO, reinforced their long-term perspective at the same conference:
The joint venture has already received regulatory approvals, including the critical 2.5% royalty rate structure approved in May 2025, positioning them for advanced engineering studies and investment decisions.
Saltwerx (ExxonMobil Subsidiary)
ExxonMobil entered the Smackover lithium race through its subsidiary Saltwerx, leveraging its extensive oil and gas experience in the region. In June 2025, Saltwerx received approval from the Arkansas Oil and Gas Commission for a 2.5% royalty rate—matching the rate previously approved for the Standard Lithium-Equinor joint venture.
Patrick Horwath, ExxonMobil's Lithium Global Business Director, described this regulatory milestone as pivotal:
Exxon's approach leverages its deep understanding of subsurface geology and fluid movement, which has already yielded operational efficiencies in preliminary development work. For instance, the company has reduced drilling time to target depths by applying techniques refined through decades of oil and gas operations.
Horwath further emphasized how oil and gas expertise transfers to lithium extraction:
Saltwerx is now advancing its engineering studies and preparing for project development decisions, though it has not yet publicly announced a specific production timeline.
Other Emerging Players in the Region
The Smackover's potential has attracted additional energy majors. Notably, Chevron recently acquired two leases in the region, validating the formation's prospects. While Chevron has not yet detailed its development plans, the company's entrance represents further institutional validation of the Smackover's commercial viability.
Several smaller specialized lithium developers are also exploring opportunities in the formation, potentially creating a diverse ecosystem of producers with varying scales and approaches. This competitive landscape could accelerate innovation while ensuring the region's resources are developed efficiently.
How Does Direct Lithium Extraction Technology Work in Smackover?
The development of Smackover lithium projects relies on Direct Lithium Extraction (DLE) technologies—advanced methods that represent a significant departure from traditional lithium production techniques. Understanding these technologies is crucial to appreciating why the Smackover Formation has attracted such substantial investment.
DLE Technology Advantages for Brine Resources
Unlike conventional lithium production that relies on solar evaporation ponds (which can take 18-24 months to concentrate lithium), DLE technologies can extract lithium directly from brines in hours or days. The process typically follows these steps:
This approach offers several significant advantages:
These benefits address many of the sustainability concerns associated with traditional lithium production while potentially improving economic outcomes through faster time-to-market and higher recovery rates.
Adapting Oil & Gas Expertise to Lithium Extraction
Companies developing Smackover lithium resources are leveraging significant crossover between oil and gas operations and DLE implementation. The skills and knowledge transfer creates unique advantages for these projects.
Key transferable capabilities include:
Lisa Rebora of Equinor highlighted this knowledge transfer during industry panel discussions, noting how their subsurface modeling expertise helps optimize brine extraction and reinjection strategies. Similarly, ExxonMobil's Patrick Horwath emphasized how understanding fluid dynamics in porous media—a core oil and gas competency—directly applies to DLE operations.
This convergence of traditional energy expertise with innovative extraction technologies positions Smackover projects to potentially achieve operational efficiencies not available to greenfield lithium developments elsewhere.
What Recent Regulatory Developments Impact Smackover Lithium Projects?
The regulatory landscape for Smackover lithium projects has evolved significantly in recent years, with several key developments creating a more supportive environment for project advancement. These regulatory milestones have been critical in de-risking investments and establishing clear operational frameworks.
Royalty Rate Approvals and Their Significance
One of the most significant regulatory developments came in June 2025, when the Arkansas Oil and Gas Commission approved a 2.5% royalty rate for Saltwerx (ExxonMobil's subsidiary). This followed a similar approval for the Standard Lithium-Equinor joint venture in May 2025, establishing consistency across major projects in the region.
The royalty structure is based on the total value of lithium production, calculated using the quarterly average of Fastmarkets' assessment of lithium carbonate prices. As of June 27, 2025, this benchmark stood at $11.25-12.50 per kg, with the Q2 2025 average price at $11.73 per kg (down from $11.93 per kg in Q1 2025).
Patrick Horwath of ExxonMobil described the royalty approval as "the last main regulatory step" needed before projects can advance to final engineering studies and investment decisions. This standardized approach provides clarity for developers and helps establish the economic parameters for project evaluation.
The royalty framework represents a balance between generating state revenue and maintaining project competitiveness in global markets. By tying rates to market prices rather than imposing fixed fees, the structure accommodates market fluctuations while ensuring the state benefits from higher prices during market upswings.
Arkansas State Support for Lithium Development
Beyond specific royalty approvals, the Arkansas state government has implemented a comprehensive strategy to support lithium sector development. These initiatives aim to create an ecosystem that extends beyond extraction to include downstream processing and manufacturing.
Key elements of Arkansas' lithium development strategy include:
Hugh McDonald, Arkansas Commerce Secretary, emphasized this comprehensive approach at industry conferences:
This state-level support complements federal initiatives under the Inflation Reduction Act, which provides incentives for domestic critical mineral production and battery manufacturing. Together, these policies create a supportive environment for Smackover lithium development that extends from extraction through the value chain.
How Are Market Conditions Affecting Smackover Development Plans?
Despite the strategic importance of developing domestic lithium resources, Smackover projects must navigate market realities that influence investment decisions and development timelines. Understanding current market conditions and long-term fundamentals provides crucial context for evaluating project viability.
Navigating the Current Lithium Price Environment
The lithium market has experienced significant volatility in recent years. After reaching historic highs in 2022-2023, prices have undergone a substantial correction. As of June 2025, Fastmarkets assessed lithium carbonate prices at $11.25-12.50 per kg—well below previous peaks but still above historical averages.
Recent price trends show continued softening, with the Q2 2025 average price of $11.73 per kg representing a 1.7% decline from the Q1 2025 average of $11.93 per kg. This downward pressure reflects increased supply coming online globally, temporarily outpacing demand growth.
Companies developing Smackover resources are responding to these market conditions by:
David Park, Standard Lithium's CEO, articulated this approach at industry conferences, emphasizing their focus on "controlling what we can: derisking projects and securing offtake agreements" rather than reacting to short-term price movements.
Long-Term Market Outlook Beyond Current Downturn
Despite current market softness, companies developing Smackover lithium resources maintain a decidedly long-term perspective. Their investment decisions reflect confidence in lithium demand growth driven by electric vehicle adoption and energy storage deployment.
Patrick Horwath of ExxonMobil captured this multi-decade view:
This long-term outlook is supported by several fundamental factors:
Companies are positioning Smackover projects to come online around 2028—a timeline that aligns with projected supply gaps as EV adoption accelerates. This strategic timing could allow projects to avoid current market oversupply while preparing for the next demand surge.
The current market environment may ultimately strengthen Smackover projects by enforcing cost discipline and operational efficiency during the development phase. Projects that advance through this challenging period may emerge more resilient and competitive in the long run.
What Challenges Must Smackover Lithium Projects Overcome?
Despite their promising potential, Smackover lithium projects face several significant challenges that must be addressed to achieve commercial success. These hurdles range from technical and operational issues to broader supply chain and infrastructure constraints.
Technical and Operational Hurdles
Developing commercial-scale DLE operations in the Smackover Formation involves overcoming several technical challenges:
Project developers are addressing these challenges through extensive pilot testing, engineering studies, and collaboration with technology providers. The involvement of major energy companies brings valuable experience in managing complex extraction operations, potentially mitigating some of these technical risks.
Supply Chain and Infrastructure Development Needs
Perhaps the most significant challenge facing Smackover lithium projects is the lack of midstream processing infrastructure in the United States. Patrick Horwath of ExxonMobil highlighted this critical gap:
This infrastructure deficit includes:
Addressing these gaps requires coordination between project developers, downstream manufacturers, and government agencies. Hugh McDonald, Arkansas Commerce Secretary, emphasized state efforts to address these challenges through an "accelerator" program designed to foster lithium-sector entrepreneurship and attract complementary businesses.
Industry leaders note that establishing complete supply chains—from extraction through battery manufacturing—represents both a challenge and opportunity. Projects that can integrate vertically or establish strategic partnerships across the value chain may gain competitive advantages while addressing infrastructure gaps.
How Does Smackover Compare to Global Lithium Sources?
As Smackover lithium projects advance toward production, they must compete in a global marketplace with established producers and other emerging resources. Understanding this competitive landscape is essential for assessing the long-term viability and strategic importance of these projects.
Competitive Position Analysis
Smackover lithium projects face competition from several established and emerging global sources:
Jul 28