HOUSTON, September 28th (Argus) - The US lithium mining development company Smackover Lithium has signed a new supply agreement with Tullow. This agreement is the final procurement contract necessary for the advancement of debt financing for its lithium carbonate project in southwestern Arkansas.
Smackover stated that as a joint venture between Standard Lithium of the United States (holding 55% and Equinor of Norway holding 45%), the company has added an option: in addition to the existing commitment of 8,000 tons per year, it can also sell up to an additional 4,000 tons per year of battery-grade lithium carbonate to Tullow. This increases the maximum procurement volume under the 10-year agreement to 12,000 tons per year.
The additional procurement volume is determined by Smackover itself and can be allocated to other customers. However, specific prices and other commercial terms have not been disclosed.
In addition, Smackover previously signed a 10-year agreement with the South Korean battery manufacturer LG Energy Solution on August 31st, stipulating an annual purchase of 8,000 tons. Combined with this newly added procurement volume, the total potential procurement volume has now reached 20,000 tons per year. The initial rated capacity of this project is 22,500 tons per year, and the target procurement volume is approximately 18,000 tons per year, accounting for about 80% of the total capacity.
Smackover stated that no further acquisition agreements need to be signed to advance the financing. Three export credit agencies are conducting due diligence on a debt project of approximately $1.1 billion. The final investment decision is expected to be made later this year, and the first commercial production is planned to be achieved in 2029. This project will be one of the first large-scale commercial applications of direct lithium extraction technology in the United States.
