LG Energy locked in ten years of American lithium — extracted without evaporation ponds

Smackover Lithium, a joint venture between Standard Lithium and Norway's Equinor, signed a $1.5 billion deal to supply battery-grade lithium to LG Energy Solution from Arkansas brine.

LG Energy Solution signed a binding ten-year agreement with Smackover Lithium, a joint venture between U.S.-based Standard Lithium and Norwegian state oil company Equinor, to buy battery-grade lithium from the Southwest Arkansas project, near the town of Lewisville. The deal, announced on August 31, 2026, calls for supplying 8,000 metric tons of lithium carbonate a year starting in 2029, with an estimated value of $1.5 billion over the life of the contract.

The detail that sets this project apart from most of the world's lithium production is the extraction method. The two largest current producing regions, Chile and Argentina, extract lithium from brine by pumping it into large solar evaporation ponds — a process that takes twelve to eighteen months and consumes huge stretches of land. Southwest Arkansas uses direct lithium extraction (DLE), a technology that separates lithium from brine through physicochemical processes in an industrial plant, without relying on solar evaporation or large open-air ponds. That cuts processing time from months to hours and shrinks the project's land footprint — a relevant advantage in the United States, where water availability and environmental permitting tend to be bigger bottlenecks than in the Atacama desert. The brine used in Arkansas comes from the Smackover geological formation, historically tapped by the oil and bromine industries — which means much of the drilling and fluid-handling infrastructure in the region already exists, now adapted for lithium. The LG Energy contract adds to an earlier agreement with trading firm Trafigura, bringing total committed purchases to about 16,000 tons a year — close to 90% of the planned initial capacity of 22,500 tons a year — even before the final investment decision, expected later this year. The project also already has more than $1 billion in financing interest letters from three export credit agencies.

Supply agreements signed ahead of a final investment decision act as a market confidence signal — and, in this case, also as a geographic diversification strategy for LG Energy, which reduces its dependence on lithium processed in Asia and meets local-content requirements under U.S. critical minerals legislation. For the industry, the case reinforces that direct lithium extraction has stopped being a niche technology and is becoming the preferred route for new projects in regions without geography favorable to solar evaporation, such as the southern United States. The combination of oilfield brownfield, DLE and integration with the South Korean battery supply chain is also a model that other brine basins tied to oil and gas production — including outside the U.S. — should watch closely in the coming years.