The future of lithium production in the United States is experiencing significant growth in Arkansas, with key players such as ExxonMobil, Albemarle, and Standard Lithium making notable investments in the state. This development coincides with a rising global demand for lithium, fueled largely by the increased use of electric vehicles and the need for energy storage. In 2023, global lithium consumption reached 180,000 metric tons, up from 142,000 metric tons the previous year, as reported by the United States Geological Survey. Despite this surge in consumption, the U.S. currently produces less than 1% of the global lithium supply.
The majority of the world’s lithium currently comes from countries like Australia, Chile, and China. However, Arkansas has the potential to alter this dynamic due to its Smackover Formation, which is abundant in lithium brine. According to Wesley Hamilton, Chief Technology Officer and Vice President of Research and Technology at Albemarle—the world’s leading lithium producer—the quality of lithium resources in this region makes it particularly attractive. The key factors are the concentration of lithium and the efficiency of its extraction from the brine.
Historically, Arkansas has been a significant producer of bromine, extracted from the same brines now being utilized for lithium. The Smackover Formation holds over 4 million metric tons of lithium, a quantity sufficient to power millions of electric vehicles and devices, as indicated by Galvanic Energy. This potential has garnered considerable interest from companies aiming to tap into these resources.
ExxonMobil acquired 120,000 acres in the Smackover Formation in 2023 and plans to commence production of battery-grade lithium by 2027, projecting an output enough to support the manufacturing of over 1 million electric vehicles annually by 2030. Standard Lithium, active in Arkansas since 2020, is expanding its Direct Lithium Extraction (DLE) facility in El Dorado, bolstered by a $100 million investment from Koch Strategic Platforms. The DLE method is promoted as a more environmentally friendly extraction process, utilizing advanced filters to minimize energy and water consumption.
Nonetheless, the path forward presents challenges. The DLE technology, while promising, is yet to be proven on a large scale. Moreover, lithium prices have plummeted from over $80,000 per metric ton in 2022 to approximately $10,600, due to oversupply, slower-than-anticipated growth in the electric vehicle sector, and the advent of new battery technologies, according to Benchmark. Shon Hiatt, Director of the Business of Energy Transition Initiative at the University of Southern California, noted that the sharp decline in lithium prices poses significant difficulties for companies striving to scale up, as many standalone lithium firms are struggling to generate the necessary revenues.
Additionally, China’s dominance in global battery cell production, accounting for 80% as per the Atlantic Council, raises concerns about the U.S. supply chain’s vulnerability. Despite these obstacles, companies like Albemarle and Standard Lithium remain optimistic about Arkansas’ prospects as a crucial player in the global lithium market.
Robert Mintak, CEO of Standard Lithium, emphasized the importance of U.S. involvement in the sector, stating, “The United States has to step up. We’ve targeted the Smackover formation in Arkansas because we believe it’s the best resource to develop.”
Arkansas is positioning itself at the forefront of U.S. lithium production, with potential significant implications for the future of the energy market. For further insights, a related video can be viewed to gain a deeper understanding of Arkansas’ strategic role in advancing lithium production.
