The U.S. Department of Energy has selected Standard Lithium Ltd. [SLI-TSXV, NYSE, S5L-FRA] and its Norwegian partner Equinor for a conditional award of up to US$225 million to support the construction of the central processing facility for Phase 1 of the South West Arkansas lithium project.
The central processing facility for Phase 1 is being designed to annually produce 22,500 tonnes of battery-quality lithium carbonate, utilizing Direct Lithium Extraction (DLE) technology.
“This selection, overseen by the DOE’s Office of Manufacturing and Energy Supply Chains, is one of the largest ever awarded to a U.S. critical minerals project and is part of the second wave of funding under the Infrastructure Investment and Jobs Act aimed at expanding domestic manufacturing of all segments of the battery supply chain and increasing production of critical minerals in the U.S.,’’ Standard said in a press release.
The provisional grant is dependent on completing successful final negotiations with the DOE.
Standard Lithium shares advanced on the news, rising 5.8% or 10 cents to $1.82. The shares trade in a 52-week range of $4.85 and $1.45.
The South West Arkansas project, located in Lafayette and Columbia Counties, Arkansas, is being developed in a partnership owned 55% by Standard Lithium and 45% by Equinor.
In August, 2023, Standard Lithium announced the results of a positive preliminary feasibility study (PFS) for its Southwest Arkansas lithium project, also known as the Lanxess Project.
The study was in line with Standard’s plan be a North American supplier of lithium chemicals by bringing the first new commercial lithium project into production in the U.S. in six decades.
The PFS indicated base case production of 30,000 tonnes per year of battery-quality lithium hydroxide monohydrate. The projected 20-year-plus operating life is supported by an updated 2023 Upper Smackover indicated and Middle Smackover inferred resource of 1.4 million tonnes and 400,000 tonnes LCE, respectively, at an average grade of 437 mg/L. Capital expenditures are pegged at $1.3 billion, including a 20% contingency.
The company previously said it is targeting construction to begin in 2025 with production to commence in 2027, subject to continuing project definition, due diligence, available financing and receipt of future feasibility studies.
However, the project’s design is being updated from its original preliminary feasibility study, and now targets a larger total output of 45,000 tonnes per annum of lithium carbonate, to be developed in two phases of 22,500 tonnes each. Standard said a definitive feasibility study and front-end engineering design are currently underway to support this expansion.
The project’s DLE and lithium carbonate facilities are expected to be located on a 118-acre property in rural Lafayette County, approximately 10 kilometres from Lewisville, Arkansas. In addition to creating 300 construction and 100 direct jobs, the project is expected to benefit the local community via infrastructure improvements, community health initiatives, educational partnerships and workforce development programs.
