Trafigura Signs 10-Year Deal with Smackover Lithium

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Written by Daniel Graeber for IIR Energy Intelligence (Sugar Land, Texas)

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Summary

Smackover Lithium will supply Swiss commodity trader Trafigura with lithium carbonate. The facility in Arkansas will be the first of its kind in the U.S. when it comes online, which is scheduled for 2028.

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80,000 Metric Tons of Lithium Carbonate

Swiss commodity trader Trafigura said it secured more than 80,000 tons of battery-grade lithium carbonate in a 10-year deal with U.S. domestic producer Smackover Lithium.

Smackover Lithium is a joint venture between Norwegian energy company Equinor and Standard Lithium Limited. The company aims to start commercial operations at its South West Arkansas (SWA) Project before the decade is out, churning out around 45,000 metric tons per year of product.

"The SWA Project is expected to provide a reliable source of battery-grade lithium carbonate produced in the United States, enhancing domestic supply chains," said Gonzalo de Olazaval, the head of metals and minerals at Trafigura. "We look forward to collaborating with Smackover Lithium on this strategic project and to delivering this material to customers across North America and globally."

Trafigura committed to 8,000 metric tons per year in lithium carbonate over the next 10 years. Pricing terms were not disclosed.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project and Plant databases can learn more about the SWA development from a detailed project report and plant profile.

The agreement follows a feasibility study that found initial production rates could total about 22,500 metric tons per year, with first production as early as 2028. If started as expected, it would become the first commercial direct-lithium extraction (DLE) project in the U.S.

The facility already has received a $225 million grant from the federal government to back DLE. The process requires significantly less land and water than conventional methods, and it avoids environmentally sensitive operations such as open-pit mining. On top of an accelerated production time, the method also can recover lithium from underground brine reserves more efficiently than traditional evaporation methods.

Brine, meanwhile, is often associated with petroleum. The Smackover development began life in the 1920s as an oil field.

By the Numbers

• 80,000 tons for Trafigura
• 25% of lithium imported

Not the Only Game in Town

Apart from domestic mining operations, some developers are turning to recycling to find the critical minerals needed for modern technology. Once disposed, disassembled and shredded, recyclers can draw on the so-called black mass for sources of lithium, cobalt, manganese and other critical minerals. These materials can be extracted from the black mass and reused for new batteries or other applications.

Li-Cycle is one of the largest battery recyclers in North America, with operations in Toronto and New York. Its facility in Rochester could process as much as 35,000 tons of black mass per year for repurposing.

Subscribers can see the related project report.

U.S. President Donald Trump began his second, non-consecutive term in the White House by signing hundreds of executive orders, including ones that focused on advancing critical minerals at home "contingent on the availability of appropriated funds." Importing about 25% of its lithium, the U.S. Department of Energy in August included it on its comprehensive critical minerals list.

A report last year from the Federal Reserve Bank of Dallas, however, found that the return on investments in the lithium mining sector is low, making domestic efforts somewhat risky because of chronically low market prices.

Key Takeaways

• SWA is set to become the first U.S. facility of its kind.
• The facility could start commercial operations as early as 2028.

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR News Intelligence) 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) 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 250,000 current and future projects worth $30.2 trillion (USD).