Arkansas: The Future Hub of U.S. Lithium Production and Its Impact on Local Businesses
The future of lithium production in the U.S. is rapidly gaining traction, with Arkansas at the forefront of this growing industry. Major players such as ExxonMobil, Albemarle, and Standard Lithium are making significant investments in the state. This comes at a time when global demand for lithium, fueled by the rising popularity of electric vehicles (EVs) and energy-storage technologies, is soaring. According to the United States Geological Survey, global lithium consumption reached 180,000 metric tons in 2023, up from 142,000 metric tons in 2022. However, the U.S. still produces less than 1% of the world’s lithium supply.
The majority of the world’s lithium currently comes from countries like Australia, Chile, and China, but Arkansas has the potential to change this dynamic. The state is home to the Smackover Formation, a geological treasure trove rich in lithium brine, a key resource for lithium extraction. This formation is poised to become a crucial resource for the U.S. as demand for lithium continues to climb.
Wesley Hamilton, Chief Technology Officer and Vice President of Research and Technology at Albemarle, the world’s leading lithium producer, emphasized the advantages of the region. “Lithium resource quality is really what makes this a great region,” Hamilton said. “It comes down to two things: the concentration of lithium and the ability to extract it efficiently from the brine.” Arkansas has a history of producing bromine, which is also extracted from the same brines now being tapped for lithium. According to Galvanic Energy, the Smackover Formation holds over 4 million metric tons of lithium, enough to power millions of EVs and devices, making the region a hotspot for companies looking to capitalize on this resource.
ExxonMobil is one of the major companies diving into Arkansas’ lithium potential. In 2023, the company acquired 120,000 acres in the Smackover Formation and aims to start producing battery-grade lithium by 2027. ExxonMobil projects that it will be able to produce enough lithium to supply the manufacturing of over 1 million EVs annually by 2030. Meanwhile, Standard Lithium, which has been operating in Arkansas since 2020, is expanding its Direct Lithium Extraction (DLE) facility in El Dorado. This expansion is backed by a $100 million investment from Koch Strategic Platforms. DLE is an innovative, eco-friendly extraction method that uses advanced filtration technology to minimize energy and water usage.
However, the road to becoming a lithium powerhouse is not without challenges. DLE technology, while promising, has yet to be proven on a large industrial scale. Moreover, lithium prices have plummeted from over $80,000 per metric ton in 2022 to around $10,600 today, largely due to an oversupply of lithium, slower-than-anticipated EV growth, and the emergence of new battery technologies. Shon Hiatt, Director of the Business of Energy Transition Initiative at the University of Southern California, noted, “Lithium prices are falling precipitously, and many standalone lithium companies are not generating the revenues they need. That volatility is a big challenge for companies trying to scale up.”
Another significant challenge lies in the global supply chain. China currently controls 80% of global battery cell production, raising concerns about U.S. reliance on foreign suppliers for critical materials. This has put additional pressure on U.S. companies to boost domestic production of lithium and other essential components in the EV and energy storage sectors.
Despite these hurdles, companies like Albemarle and Standard Lithium remain optimistic about Arkansas’ potential to play a pivotal role in the global lithium market. Robert Mintak, CEO of Standard Lithium, highlighted the strategic importance of the Smackover Formation. “The United States has to step up,” Mintak said. “We’ve targeted the Smackover Formation in Arkansas because we believe it’s the best resource to develop.”
The growing lithium industry in Arkansas also holds significant implications for local businesses and the broader economy. As companies invest in lithium extraction and production, local suppliers, contractors, and service providers are poised to benefit. Increased demand for construction, engineering, and logistical services will likely create new jobs and boost the economy in regions where lithium operations are concentrated. Small businesses, particularly those involved in support services like equipment supply, transportation, and workforce training, could see a rise in opportunities as these lithium giants ramp up operations.
Moreover, the rise of Arkansas as a hub for lithium production could attract more companies and investors to the region, further diversifying the state’s economic landscape. Local communities could see infrastructure improvements, increased tax revenues, and greater investment in public services as a result of the booming lithium industry. Additionally, as the U.S. looks to reduce its dependence on foreign lithium sources, Arkansas stands to become a key player in the nation’s clean energy transition, further elevating its economic standing.
While the future of lithium production in Arkansas is filled with both opportunities and challenges, the state’s vast resources and strategic location position it well to become a central player in the global lithium market. As investments from companies like ExxonMobil, Albemarle, and Standard Lithium continue to flow into the state, local businesses, such as a Little Rock Truck Accident Lawyer, and communities could experience significant economic benefits. The race to develop efficient and scalable lithium extraction methods may ultimately transform Arkansas into a major hub for the next generation of clean energy technologies, with ripple effects felt across the state’s economy.
