LG Energy Solution has signed a binding take-or-pay agreement to purchase 80,000 tonnes of battery-quality lithium carbonate from Smackover Lithium’s South West Arkansas project.
Smackover Lithium will supply the South Korean battery manufacturer with 8,000 tonnes annually for ten years after commercial production begins. The project’s developers are targeting first production in 2029, although a final investment decision has yet to be taken.
Smackover Lithium is a partnership between project operator Standard Lithium, which owns 55%, and Equinor, which holds the remaining 45%.
Arkansas project designed to produce 22,500 tonnes annually
The initial phase of the South West Arkansas project is designed to produce 22,500 tonnes of lithium carbonate annually. LG Energy Solution’s allocation therefore represents more than one-third of its planned output.
The agreement follows an earlier ten-year offtake contract under which commodities trader Trafigura will also purchase 8,000 tonnes annually. Smackover Lithium said the two contracts account for around 90% of the volume it had targeted for customer offtake agreements.
BESTmag reported in May that the project was among the most advanced of several developments seeking to extract lithium from brines beneath Arkansas.
The lithium will be recovered using direct lithium extraction and subsequently purified into battery-quality carbonate. In August, Nano One tested lithium carbonate produced from South West Arkansas brine in its One-Pot process for manufacturing lithium iron phosphate cathode active material.
LG Energy Solution said the US-produced material would support its growing domestic supply chain for LFP batteries used in energy storage systems. The company operates seven US battery-production facilities and said most have established or planned LFP capacity.
Earlier in August, LG Energy Solution began production at its new 35 GWh battery plant in Lansing, Michigan. The plant produces LFP cells for energy storage systems and nickel manganese cobalt cells for electric vehicles.
LG Energy Solution said the Arkansas lithium would satisfy US non-prohibited foreign entity sourcing requirements.
Kang Yeol Lee, procurement centre leader at LG Energy Solution, said: “We are pleased to begin this partnership with Smackover Lithium and the agreement marks another step toward establishing a solid and resilient supply chain that keeps our products competitive in key strategic markets.
“By bringing both battery production and sourcing to the US, we will deliver competitive and sustainable products to our customers driving the global energy storage and EV markets.”
Smackover Lithium is seeking project financing alongside the remaining offtake commitments. The developers previously reported indications of interest for more than $1 billion in debt from three export credit agencies and are targeting a final investment decision during 2026.
