Standard Lithium Seeks Approval for Lithium Royalty Framework in Arkansas

Standard Lithium and Equinor's joint venture, Smackover Lithium, have filed an application with the Arkansas Oil and Gas Commission to establish a comprehensive lithium royalty framework for the South West Arkansas Project. The proposed royalty structure includes a 2.5% gross royalty based on lithium output and North American index pricing, with additional annual brine fees potentially bringing total compensation to approximately 3%.

The proposed royalty framework represents a significant step in developing the region's lithium extraction capabilities. By establishing a clear compensation mechanism, the joint venture aims to drive regional investment and provide fair economic benefits to local landowners. A public hearing is scheduled for May 28, 2025, in Magnolia, Arkansas, where the details of the proposal will be discussed.

This development is particularly noteworthy in the context of the growing lithium market, driven by increasing demand for electric vehicle batteries and renewable energy storage solutions. The South West Arkansas Project, located in the Smackover Formation, is positioned to contribute to the United States' domestic lithium production efforts, potentially reducing reliance on international lithium supplies.

The proposed royalty framework demonstrates a collaborative approach to resource development, balancing the interests of the mining company, local landowners, and the broader economic ecosystem. By creating a transparent and fair compensation model, Standard Lithium and Equinor are setting a precedent for responsible resource extraction in the emerging lithium industry.