Standard Lithium and Equinor's joint venture, Smackover Lithium, have filed an application with the Arkansas Oil and Gas Commission to establish a lithium royalty framework for the Phase I of their South West Arkansas Project. The proposed framework includes a 2.5% gross royalty based on lithium output and North American index pricing, with additional annual brine fees that would bring total compensation to approximately 3%.
The proposed royalty structure represents a significant step in developing the lithium extraction industry in Arkansas. By creating a transparent and fair compensation mechanism, the joint venture aims to attract investment and support economic development in the region. A public hearing on the proposed royalty framework is scheduled for May 28, 2025, in Magnolia, Arkansas.
The project is part of Standard Lithium's broader strategy to develop sustainable lithium production in the United States, focusing on the Smackover Formation, a world-class lithium-brine asset. By partnering with global energy leader Equinor ASA, the company is advancing lithium extraction technologies and exploring new opportunities in Arkansas and Texas.
This initiative could have significant implications for the emerging electric vehicle and renewable energy sectors, which rely heavily on lithium for battery production. The proposed royalty framework demonstrates a collaborative approach to resource development that balances corporate interests with local economic benefits.
