Smackover Lithium signs 8,000 t/yr offtake with LG Energy Solution

The binding 10-year deal brings the South West Arkansas lithium project to roughly 90% of its targeted offtake volume, clearing a path to a

By Rowen Brooks Wed, 9 September 2026 AI level 2 of 5

AI level 2 of 5: drafted by our AI editorial assistant from source material our editor chose; fact-checked, edited and signed off by Mark Walker, Editorial Director. What the levels mean

Industrial conveyors and a tall processing tower stand before massive white granular stockpiles under a clear blue sky.

Smackover Lithium, the joint venture between Standard Lithium (NYSE.A/TSXV: SLI) and Norwegian energy major Equinor, has signed a binding take-or-pay offtake agreement with LG Energy Solution for 8,000 metric tonnes per year of battery-quality lithium carbonate. The 10-year contract, which commences on the start of commercial production, is the second major offtake the project has secured and takes the South West Arkansas (SWA) Project to roughly 90% of its targeted sold volume ahead of a final investment decision (FID) the partnership is aiming to reach before year-end.

The SWA Project has a nameplate capacity of 22,500 metric tonnes of lithium carbonate equivalent per year in its initial phase. The partnership's stated target is to secure offtake agreements for around 80% of that volume; with the LG Energy Solution deal stacked on top of an earlier 8,000 t/yr contract with commodities trader Trafigura, announced in March, the project has now committed approximately 71% of annual capacity by volume and exceeded the 80% threshold on a secured-offtake basis. One further, smaller agreement is said to be in advanced discussions. Pricing terms are subject to confidentiality but are described as structured to support project debt financing.

Financing path

The offtake process is running in parallel with a project financing effort. Smackover Lithium disclosed in December 2025 that three major Export Credit Agencies (ECAs) had provided indications of interest for more than $1 billion in project debt, with due diligence described as well underway. ECA-backed debt is a common financing structure for critical-mineral projects with strategic importance to a government's industrial policy, and US critical-minerals supply has attracted support from agencies including the US Export-Import Bank and the Department of Energy's loan programmes.

David Park, chief executive of Standard Lithium, said the agreement "further anchors our customer offtake portfolio" and that the partnership has "secured a vast majority of the offtake agreements needed to move forward with our Project financing plans and a Final Investment Decision." LG Energy Solution's procurement lead, Kang Yeol Lee, framed the deal as part of a broader effort to build "a solid and resilient supply chain" for battery production and sourcing in the United States. Construction is planned to begin promptly after FID, with first commercial production targeted for 2029.

Market context

The SWA Project uses direct lithium extraction (DLE), a processing technology that draws lithium from underground brine rather than from hard-rock mining or conventional evaporation ponds. DLE is faster and uses less land and water than the South American evaporation-pond model, but remains in the early stages of commercial-scale deployment. The SWA Project is among the most advanced DLE projects in North America and has benefited from a US Department of Energy grant under its critical minerals programme.

LG Energy Solution is one of the largest lithium-ion battery manufacturers globally and a major supplier to electric vehicle (EV) and energy storage system markets. The US Inflation Reduction Act's battery-sourcing requirements under Section 45X and the EV tax credit provisions of Section 30D have created strong commercial incentives for battery makers and automakers alike to source lithium from US or free-trade-agreement partner countries, making domestic supply agreements like this one strategically valuable beyond the spot price. Several other North American lithium developers, including projects in Nevada and Quebec, are competing to fill the same supply gap that the SWA Project is targeting.

The partnership's ability to close FID and begin construction on schedule will depend on finalising the ECA debt package and any remaining equity contributions. With offtake essentially fully subscribed, the financing conversation will now dominate the project's near-term news flow.