Smackover Lithium, the joint venture formed by Standard Lithium and Equinor, has secured a binding offtake agreement with commodities trader Trafigura to purchase 8,000 metric tonnes of lithium carbonate per year for a 10‑year period, totaling 80,000 tonnes. The deal covers more than 40 % of the Southwest Arkansas project’s target production of 22,500 tonnes per annum.
The joint venture, named Smackover Lithium, is owned 55 % by Standard Lithium and 45 % by Equinor. The agreement is a key step toward the project’s 2026 final investment decision and 2028 first production, and it provides a substantial revenue stream that will help secure the $1 billion-plus debt financing that the project has attracted.
Trafigura’s Head of Metals and Minerals, Gonzalo De Olazaval, said, "We are pleased to have signed this offtake agreement with Smackover Lithium, further strengthening our North American critical minerals footprint. The SWA Project is expected to provide a reliable source of battery‑grade lithium carbonate produced in the United States, enhancing domestic supply chains. We look forward to collaborating with Smackover Lithium on this strategic project and to delivering this material to customers across North America and globally."
Standard Lithium CEO David Park noted, "The execution of this offtake agreement was the culmination of months of collaboration and negotiation and is a major milestone in moving the SWA project toward FID and construction." Equinor’s Executive Vice President for Technology, Digital & Innovation, Hege Skryseth, added, "The U.S. Department of Energy's support demonstrates the project's maturity and strengthens its financial robustness as we work toward a final investment decision. We look forward to working with Standard Lithium and alongside the local community to enhance the U.S. lithium supply chain by deploying innovative technology."
The Southwest Arkansas project will use Direct Lithium Extraction (DLE) technology, licensing Aquatech’s Lithium Selective Sorption process. The U.S. Department of Energy awarded a $225 million grant in January 2025 to support construction of a processing facility, and the project’s definitive feasibility study projects a net present value of $1.7 billion and an internal rate of return of 20.2 % based on a lithium carbonate price of $22,400 per tonne.
By securing a 40 % offtake, Smackover Lithium has de‑risks a significant portion of its production pipeline, making it more attractive to lenders and investors. The agreement also signals strong market confidence in the viability of DLE technology and the company’s ability to deliver battery‑grade lithium carbonate domestically, positioning it as a credible U.S. lithium producer in a sector where supply chain security is increasingly valued by battery manufacturers.
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