Texas Smackover sets grade high for lithium brine

Smackover Lithium, a joint venture between Standard Lithium (TSXV: SLI; NYSE-A: SLI) and Norway state oil company Equinor (NYSE: EQNR), says it has North America’s highest lithium-in-brine grades in the first inferred resource for the Franklin project in northeast Texas.

The project has 0.61 cubic km of brine averaging 668 milligrams per litre lithium for 2.16 million tonnes lithium carbonate equivalent, according to a press release on Wednesday. It also includes 15.4 million tonnes of potash (as potassium chloride) – newly added to the U.S. Geological Survey’s draft critical minerals list – and 2.64 million tonnes of bromide, the company said.

“This initial project definition marks a key step toward the ultimate goal of reaching production of over 100,000 tonnes per year of lithium chemicals in Texas through multiple phases,” Standard Lithium, which operates the 55:45% JV, said in the release.

The resource for a project combining mining with oil and gas know-how comes as other similar partnerships plumb reservoirs in the huge Smackover, a limestone formation stretching from Texas through Louisiana, southern Arkansas, Mississippi, Alabama and into the Florida Panhandle. ExxonMobil (NYSE: XOM) has discussed initial output as early as 2027, while Albemarle (NYSE: ALB) and Standard Lithium have also expanded positions in Arkansas.

Standard Lithium shares rose 2.2% to C$4.64 in Toronto on Wednesday afternoon, taking the 12-month gain to nearly 50%. The company has a market capitalization of about C$1.1 billion ($880 million).

Next steps

Work at Franklin now turns to appraisal drilling, re-entering three shut-in wells and refining models of the Upper and Middle Smackover aquifers to support a preliminary feasibility study.

Key risks include scaling DLE to reliable commercial uptime; securing and permitting power, water and reinjection capacity while maintaining reservoir pressure; harmonizing royalties and leases across multiple owners; locking in offtake and financing amid lithium-price volatility; and demonstrating stable reservoir connectivity and grade over the life of the field. Building durable value chains for potash and bromide co-products will also be a hurdle to markets.

Smackover rising

Franklin, about 400 km northeast of Austin near Mount Vernon, spans roughly 323.8 sq. km (80,000 acres), with more than 186 sq. km leased to support the resource. The project also hosts a previously measured 806 mg/L brine at the Pine Forest-1 well.

Location map of the Smackover formation. Credit: Standard Lithium

Two additional East Texas projects being advanced could, if developed, roughly triple the JV’s portfolio in the state. Royalty and lease terms in Texas differ from Arkansas and will be a key input to project economics.

While the U.S. Geological Survey and Arkansas officials last year outlined multi-million-tonne lithium potential in Smackover brines, the battery metal fell 8% year-on-year through mid-October before firming into November.

Fastmarkets assessed China battery-grade lithium carbonate at ¥72,500–73,000 per tonne (just over $10,100) on Oct. 10, a year-low. Wall Street Journal on Wednesday reported lithium carbonate prices at $10,925 amid restocking and selective supply cuts. It’s a far cry for the November 2022 peak at around $88,500 per tonne.

DLE tech

Smackover developments plan to use direct lithium extraction (DLE), in which brine is pumped, lithium is selectively captured and purified, and brine is re-injected. DLE can shorten production cycles from months to hours and reduce land footprint, though unit costs may be higher than traditional evaporation.

Standard Lithium plans to leverage operating data from its El Dorado, Ark., demonstration plant and learnings from the South West Arkansas project.

Others leaning on DLE include Occidental Petroleum (NYSE: OXY) and Berkshire Hathaway Energy, which are trialling geothermal-brine lithium at California’s Salton Sea; E3 Lithium (TSXV: ETL) is advancing DLE on Alberta brines; and SQM (NYSE: SQM) has reported high recovery rates in Chilean trials.

On the funding front, the U.S. Department of Energy has indicated it is considering investment of up to $225 million for Standard Lithium’s South West Arkansas project.