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Arkansas vies to become US lithium hub

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State faces Chinese competition, low market prices

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Governor supports nascent DLE industry

By Ernest Scheyder

LITTLE ROCK, Arkansas, Oct 30 (Reuters) - Arkansas faces

stiff Chinese competition, sagging market prices and

technological challenges as it vies to become the hub for U.S.

lithium production, obstacles that state officials and industry

executives said this week are surmountable.

The southern state, the birthplace of former U.S. President

Bill Clinton, sits atop the Smackover, an underground geological

formation stretching from Florida to Texas filled with salty

brines containing more than 5 million metric tons of lithium,

according to the U.S. Geological Survey.

That is enough lithium to make millions of electric vehicle

batteries and other devices if the metal can be filtered using

direct lithium extraction (DLE), something that has never before

been done at commercial scale.

LITHIUM PRICES PLUNGING

Beyond technical challenges, Arkansas must contend with a

lithium price drop of more than 80% in the past 18 months,

according to Benchmark Mineral Intelligence, a fall fueled by

oversupply from Chinese rivals.

"What we're all trying to do is make Arkansas as competitive

as it possibly can be," Patrick Howarth, who runs Exxon Mobil's ( XOM )

lithium business, told the Arkansas Lithium Innovation

Summit in Little Rock.

Exxon, which has delayed by at least a year its lithium

production plans to 2028, Standard Lithium ( SLI ) and Chevron ( CVX )

are among the companies rushing to prove DLE can work in

Arkansas despite low prices.

Arkansas is betting its workforce's industrial expertise,

electricity rates among the lowest in the U.S. and a permissive

regulatory scheme will help it become the country's lithium hub.

The only U.S. lithium mine is in Nevada, operated by Albemarle

.

"We spend a lot of time persuading people outside of Arkansas

that this opportunity is real, that it can be low cost in terms

of production, that it can become a credible supply of lithium

chemicals for North America for decades to come," said Andy

Robinson, president of Standard Lithium ( SLI ), which is developing an

Arkansas DLE project with Equinor ( EQNR ).

GOVERNOR SEES DLE SUCCEEDING IN STATE

Roughly 860 people attended the summit, an increase of 15% from

a similar event held last year.

Arkansas Governor Sarah Huckabee Sanders said in an

interview she is confident DLE can succeed.

"Big companies like that don't put hundreds of millions of

dollars into things if they don't feel like they see a path

forward," said Sanders, who was press secretary for President

Donald Trump during his first term and elected as governor in

2022.

The governor said she does not believe the state's lithium

industry needs government to guarantee a minimum price for its

product - something Trump officials have discussed for critical

minerals.

Sanders added she does not think it is a disconnect that she

wants Arkansas to be a major lithium producer but does not own

an EV.

"I don't own rockets, but it's still something we're really good

at manufacturing," Sanders said, referring to the state's rocket

industry.

"I don't think you have to own a product to be able to make

it in your state, to be able to sell it and to create an

environment where those businesses can really do well."