The Arkansas Oil and Gas Commission approved a 2.5% royalty rate for Smackover Lithium and its Southwest Arkansas project in Lafayette and Columbia Counties. Smackover Lithium is a joint project between Standard Lithium and Equinor. The approval marks the first time the AOGC has approved a royalty rate for lithium from brine extraction, possibly setting a precedent for future lithium-extraction efforts in the area.
Southwest Arkansas Lithium LLC had applied for a quarterly gross royalty of 2.5% earlier in the month. The royalty will be paid to those who own land on lithium brine, along with a brine fee of $65.05 per acre per year. This would make for a total of approximately 3% royalty compensation, based on current lithium prices. The AOGC granted its approval during a Wednesday hearing in Magnolia.
“We thank the AOGC for granting royalty rate approval for Phase 1 of our SWA Project,” said Standard Lithium CEO David Park. “Establishing a fair and equitable royalty will allow brine owners to be compensated while encouraging economic development of the state’s significant lithium resource.”
“The AOGC’s decision to grant a reasonable royalty for Phase 1 of our SWA Project demonstrates the state’s commitment to landowners and lithium development,” said Allison Kennedy Thurmond, vice president of US Lithium at Equinor. “The royalty rate is only the beginning of capital investment and moves us one step closer to our final investment decision.”
Once in full commercial production, expected in 2028, the Reynolds unit has a planned production capacity of 22,500 tonnes per year of battery-quality lithium carbonate.
Editor’s note: The photo display is for visual purposes only; it is not from the SWA Project.
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