GM-Backed Company Joins Smackover Lithium Rush

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Written by Paul Wiseman for Industrial Info Resources (Sugar Land, Texas)--Energy Exploration Technologies, Incorporated (EnergyX) (San Juan, Puerto Rico) has joined Chevron Corporation (Houston, Texas), Exxon Mobil Corporation (Spring, Texas), Standard Lithium (Vancouver, British Columbia) and others in the Smackover lithium lineup. Supported by General Motors Company (GM) (Detroit, Michigan), EnergyX announced an agreement to acquire Daytona Lithium Pty Limited, a wholly-owned subsidiary of Pantera Lithium Limited (West Perth, Western Australia), for about $40 million. With that deal, EnergyX will get Daytona's 35,000 Smackover Formation acres in Arkansas.

In April 2023, GM Ventures (Warren, Michigan) entered into a strategic agreement with EnergyX to develop the latter's lithium extraction technology.

Some estimates are that about 200,000 acres have been leased for lithium in the Smackover. EnergyX will need to apply for a lithium royalty rate from the Arkansas Oil and Gas Commission (AOGC).

In May, the state issued its first lithium royalty permit to SWA Lithium, a joint venture between Standard Lithium and energy company Equinor (Stavanger, Norway) Equinor, at a rate of 2.5%, which had been negotiated over several months. In June, regulators approved an identical rate for ExxonMobil.

EnergyX's acquisition will add to its existing 12,500 Smackover acres in northeast Texas. It also includes Pantera's grassroot Bradley, Arkansas, lithium brine mine. Pantera will be a minority stakeholder in EnergyX as part of the deal. For more on the Bradley lithium brine mine project, subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project and Plant databases can click here for the project report and click here for the plant profile.

EnergyX said it will pay about $6 million in cash and $34 million in EnergyX common stock for the acquisition.

The acquisition adds to EnergyX's Project Lonestar in the northeast Texas portion of the Smackover. Subscribers can click here for the project report and click here for the plant profile.

All companies involved in Smackover lithium are currently planning to use direct lithium extraction (DLE), which, while more environmentally friendly than many methods currently in use, has not yet been proven viable at scale.

Bloomberg estimated that 54% of worldwide lithium production is currently from brine, and that 526 kilotons (kt) will be produced by DLE technology by 2030.

EnergyX's version of direct lithium extraction, LiTAS, will employ a combination of adsorbents, solvent extraction and membranes when fully deployed. The company said this technology will initially complement the existing pond structure methods, but eventually will be its main process. LiTAS will extract up to 90% of brine-contained lithium, up from the 40-60% extraction rates from current evaporation pond strategies.

Will low lithium prices slow the rush to development? At least one expert thinks the DLE method will reduce that risk.

"The lithium market has been hit hard by low lithium prices, as a lot of new capacity has come online for a relatively small market," said Joe Govreau, VP Research Metals & Minerals for Industrial Info. "This has delayed a lot of projects in the near term. These companies are betting on the long-term viability of the projects in the Smackover using the DLE technology as a cost-effective option versus traditional mining operations in Nevada or elsewhere."

Analysts say the Smackover Formation, which stretches across parts of Arkansas, Texas, Louisiana, Mississippi, Alabama and Florida, could be home to more than 4 million metric tons of lithium.

Founded in 2018 by Chief Executive Officer Teague Egan, EnergyX has received funding from GM, POSCO, Eni Next, and a grant from the U.S. Department of Energy (DOE) to help it get going. GM's connection with the company gives GM the first right of refusal for any lithium produced by EnergyX.

In addition to its Smackover operations, EnergyX is planning Project Black Giant (Salar Punta Negra) in Chile. For more on the lithium project, click here for the project report and click here for the plant profile.

Subscribers to Industrial Info's GMI database can click here for all the project reports mentioned in this article and click here for the plant profiles.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).