As the world transitions towards renewable energy sources and electric vehicles (EVs), the importance of lithium has skyrocketed. The material is pivotal for the development of batteries, making it essential for meeting the increasing demands of the automotive and energy storage industries. In 2023, lithium consumption surged to approximately 180,000 metric tons, a notable increase from 142,000 metric tons in the previous year, as reported by the United States Geological Survey. However, despite this growing demand, the U.S. finds itself producing less than 1% of global lithium supplies. Traditionally, the majority of lithium has been sourced from countries such as Australia, Chile, and China. Nonetheless, Arkansas is positioning itself to alter the landscape of lithium production in the United States.
At the heart of this potential transformation lies the Smackover Formation, a geological marvel located in Arkansas. This region is rich in lithium brine, offering a unique opportunity for extraction. Wesley Hamilton, the Chief Technology Officer and vice president of research and technology at Albemarle, one of the leading lithium producers globally, emphasizes the importance of the formation’s resource quality. The concentration of lithium and the feasibility of efficient extraction are key factors that could enable Arkansas to emerge as a significant player in the lithium market.
Historically known for bromine production, the state is now diversifying its mineral extraction capabilities by tapping into the lithium-rich brines. The geological composition of the Smackover Formation suggests it could yield over 4 million metric tons of lithium—sufficient to meet the energy needs of millions of electric vehicles and various electronic devices. This considerable reserve has sparked interest from several corporations eager to capitalize on this underutilized resource.
Prominent companies, including ExxonMobil, Albemarle, and Standard Lithium, have begun to make substantial investments in Arkansas. ExxonMobil’s acquisition of 120,000 acres in the Smackover Formation signals its commitment to lithium production, aiming to deliver battery-grade lithium by 2027 and provide enough materials for the manufacturing of over a million EVs annually by 2030. On the other hand, Standard Lithium, operating in the region since 2020, is in the process of expanding its Direct Lithium Extraction (DLE) facility in El Dorado, buoyed by a substantial $100 million investment from Koch Strategic Platforms. DLE is praised for its environmentally friendly extraction methods that minimize both energy and water use, marking a significant advancement in lithium sourcing technology.
Despite the overwhelming enthusiasm surrounding Arkansas’ lithium potential, challenges loom on the horizon. Although DLE technology offers promising prospects, it remains unproven on an industrial scale. Moreover, a drastic decline in lithium prices—plummeting from over $80,000 per metric ton in 2022 to around $10,600 today—has raised alarm bells among industry stakeholders. This sharp decrease can be attributed to several factors, including an oversaturated market, slower adoption of electric vehicles, and the emergence of new battery technologies. Shon Hiatt, the director of the Business of Energy Transition Initiative at the University of Southern California, highlights that this volatility poses a significant hurdle for businesses attempting to scale up their operations.
Adding to these uncertainties, China currently dominates the global battery cell market, controlling around 80% of production. This reality raises concerns over supply chain vulnerability for the U.S. Should domestic production not scale effectively, manufacturers could face significant hurdles in securing necessary materials for producing batteries.
Despite the daunting landscape, executives at leading lithium companies like Albemarle and Standard Lithium continue to express optimism regarding Arkansas’ future role in the lithium sector. Robert Mintak, CEO of Standard Lithium, emphasized the critical need for the United States to enhance its lithium production capabilities to stay competitive on the global stage. The state’s significant untapped resources and investment from major corporations could pave the way for Arkansas to assert itself as a key player in the lithium economy.
As the global energy market evolves, Arkansas stands at the threshold of a new era in lithium production, intertwining geological advantages with technological advancements. Whether it can navigate challenges effectively will ultimately shape not just its future but potentially the future of lithium in the American energy landscape.