Lithium Extraction Plan Takes Root in Arkansas: Q&A

By Richard Stubbe, BloombergNEF. This article first appeared on the Bloomberg Terminal.

El Dorado, Arkansas, was an oil boomtown a hundred years ago when crude was discovered in the Smackover Formation. Since then the underground brine from the Smackover has become a major world source of commercial bromine.

Now an operation has begun to extract something new from the south Arkansas brine – lithium, the key to lithium-ion batteries, which are key to electric vehicles, which are key to decarbonizing the U.S. transportation industry. Could be a big deal.

Standard Lithium Ltd., based in Vancouver, isn’t a miner or a driller, says CEO Robert Mintak.

“We are a technology developer for specialty chemicals and extractive processes,” he said in a telephone interview with BloombergNEF in January. And it’s applying those processes to pull lithium from the brine of the Smackover in a pilot project.

El Dorado’s chemical industry and the state regulatory structure surrounding it, along with plentiful water and inexpensive electricity, have smoothed the path for Standard Lithium, which hopes to be extracting lithium at commercial scale within two years. Mintak took questions from BNEF in a January telephone interview, which has been edited for brevity and clarity.

BloombergNEF: What is Standard Lithium? How long have you been there?

Mintak: We are focused on bringing lithium projects online using modern process technology. We can leverage existing brownfield project investments in infrastructure to fast-track extraction and production. I took over the company with Andy Robinson (president and chief operating officer) in 2017.

BNEF: Why Arkansas?

Mintak: We immediately identified Arkansas as the best opportunity to bring a U.S. lithium project online and into production faster than anyone else. Fortunately, that was contrary to what anyone else was considering, so Arkansas was an open playing field for us. It’s home to the world’s second-largest brine industry – extracting minerals from brine – and the data showed lithium values were commercially viable and extremely attractive.

BNEF: How did you get started?

Mintak: The permitting aspect of it was straightforward because it’s very friendly for business development. It had 60 years of brine industry regulations, all of the infrastructure and contractors and related businesses were there, and the processes to extract lithium from brine that have been under development for 40-plus years have moved far enough from concept to being ready.

BNEF: When was this?

Mintak: We got on the ground in 2017 and acquired a large land position, one that came with decades of data from oil and gas industry drilling. So we knew it would be zero discovery risk. Fortunately for us, we entered at the same time Lanxess Corporation, who are now our partners on the project, acquired the largest brine processing facilities in North America, when they purchased Chemtura in summer 2017.

BNEF: How did that help?

Mintak: We put together a process built for the Arkansas brine, did a provisional patent filing in 2017 and built a relationship with Lanxess, where we could demonstrate the process and scale it to a pilot. Then over the last three years we raised about C$60 million to take that initial concept to now operating the world’s largest pure direct extraction lithium technology of its kind.

We’re negotiating a formal joint venture with Lanxess. We’re hopeful that this year we’ll have a final investment decision to build the first commercial lithium project in 60 years in the U.S.

BNEF: You’re on the doorstep here.

Mintak: Yes. The approach we’ve taken isn’t a silver bullet, it won’t solve problems on a number of projects, but it works in the brine industry. It would have been a struggle for us to raise the money to do what we’re doing and get as much accomplished if we weren’t able to plug into the existing infrastructure.

BNEF: How much lithium are you going to be able to extract?

Mintak: We call our technology LiSTR, for lithium stir tank reactor. That process – and we tested it with the real-world brine, not a synthetic product – is running currently, plugged into the brine output from one of Lanxess’s three plants, running 24 hours a day in real world conditions at 1/60th commercial scale.

Lanxess pushes more than 5 billion gallons of brine annually through three plants that they have in south Arkansas. So the technical report that was published on our behalf by Worley Parsons contemplates just under 21,000 tons of lithium carbonate recovered from that brine flow. So that’s five times the current U.S. production without having to permit other than amendments, without having to drill wells, without having to put in anything except the connecting pipelines, minimal environmental footprint, minimal infrastructure because everything is there – road, rail, power, water, everything.

BNEF: How much will it cost?

Mintak: Every lithium project is bespoke, whether it’s a hard rock, brine, or clay deposit. On a big project you’ve got to drop half a billion or even $1 billion just to go into production. This can get up and running because we’re plugging into the back of existing facilities. It will take three stages to get to 21,000 tons as modeled in the Worley Parsons report, for a total of $437 million.

BNEF: How much lithium is there?

Mintak: This region has 60 years’ worth of bromine production, but no one’s touched the lithium. The Smackover is an anomaly globally as a brine resource – it goes from central Texas all the way to Florida, hundreds of feet thick, limestone aquifer, extremely porous with high permeability. You can move west from where we start on the Lanxess project, through the south Arkansas fairway and then you can go across into Texas. So you could be north of 100,000 tons in the region in a couple of decades.

BNEF: You came up with the process, and then found the source?

Mintak: No, the opposite. When we went into Arkansas, we had been working in the lithium space for the better part of a decade. We were able to get brine from Lanxess that we took to Ontario, where we tested to find out what worked and what would scale. We also looked at the cost of power and the current permitted chemical reagents on the site, so we didn’t have to worry about introducing materials that might require new permitting. So the process was developed backward.

BNEF: How does it work?

Mintak: The brine is a chloride matrix brine. It comes into our plant at about 70 degrees Celsius (155 degrees Fahrenheit). It’s mixed with a lithium-selective absorbent material. We adjust the pH to around neutral and in less than 30 minutes we’re able to recover greater than 90% of the lithium from the brine, then the lithium-free brine is reinjected back into the aquifer.

Then the lithium is moved in a slurry through washing and thickening stages until it reaches a toothpaste consistency after about 90 minutes. We change the pH again by introducing a diluted hydrochloric acid, and eventually we have a raw lithium chloride solution. In less than a day we’ve recovered 90% of the lithium in a high-purity lithium chloride solution, which is very similar but higher purity than you would get as you would get in a classic evaporation process that would take 8, 12, 15 months. So it’s a much smaller footprint, higher recoveries, and a higher purity and product. You then convert that lithium chloride to a solid lithium carbonate.

BNEF: How big is the market?

Mintak: The U.S. has been overlooked as far as new projects being developed over the last few years. Australia, Chile and Argentina have seen most of the investment and new production, and that’s left a huge opportunity in North America, and the U.S. in particular, for projects that can outlast the boom-bust commodity cycle.

BNEF: What about pricing?

Mintak: We believe we’ll be in the lowest quartile globally on cost. It is a low- to mid-grade resource, not a high-grade resource like Albemarle Corp. and SQMhave in Chile, but we’re confident in our costing. The main cost inputs are chemical reagents – acids and bases. We use the same reagents that they generally use in the bromine business and they’re made locally, so the cost is low. We have good access to water, and the electricity rates are low.

BNEF: It sounds like an ideal location.

Mintak: I agree. In El Dorado, we can make the reagents we use in the same ZIP code. They teach brine handling at South Arkansas College, which is 10 minutes away. They’ve got every type of contractor to build a project like this within a 10-minute drive. You’ve got a permitting regime in place.

BNEF: What are the next steps?

Mintak: We need to take it to commercial development. This will be a first, and we will learn things along the way. The real benefit is that our project partners, Lanxess, are going to be providing the primary funding for commercial development.

BNEF: Batteries are forecast to keep getting cheaper – how much of that is because of access to inexpensive lithium?

Mintak: Lithium is part of it, but it’s more the economies of scale. Energy density is improving, and more money is going into building efficiencies. On the raw material side, there has to be an equilibrium – you’re not going to build something if you have to pay an exorbitant amount for raw materials. It also has to be at a value where people invest in the raw material upstream, and it hasn’t been there in the past couple of years, and that is going to come back to bite the industry.

BNEF: What do you mean? How do you see the next few years taking shape?

Mintak: We’re hoping to begin commercial design and development this year, with production by the end of 2022 or 2023 in a staged incremental buildup, so that will be five years. This industry usually sees seven, 10, 15 years to get a project built. So that lack of investment in the downturn may delay how fast the auto manufacturers are able to develop and push [electric vehicles] out.

BNEF: What will that mean for you?

Mintak: That’s where the opportunity for us exists in North America. The U.S.-Mexico-Canada Agreement requires 70% country of origin in North America for any product that is manufactured here, and there is zero lithium, cobalt or graphite production in North America. So it really presents an opportunity. Albemarle just announced that they’re looking at expanding production in North America, but that’s doubling their existing mine in Nevada from 4,000 to 8,000 tons, which is a drop in the bucket.

So companies like ours have a chance to really shine. I think the transition is going to be at least into 2030, because it’s going to take that long to refit the auto industry.

About BloombergNEF

BloombergNEF (BNEF) is a strategic research provider covering global commodity markets and the disruptive technologies driving the transition to a low-carbon economy. Our expert coverage assesses pathways for the power, transport, industry, buildings and agriculture sectors to adapt to the energy transition. We help commodity trading, corporate strategy, finance and policy professionals navigate change and generate opportunities.
Sign up for our free monthly newsletter →

Want to learn how we help our clients put it all together? Contact us