South Arkansas Lithium Project Secures Major LG Energy Deal

By Wesley Brown, Arkansas Delta Informer Executive Editor

LG Energy Solution, one of the world’s largest manufacturers of lithium-ion batteries for the electric car (EV) industry, has signed a multi-year agreement with the fast-growing Smackover Formation joint venture in south Arkansas to supply battery-grade lithium carbonate for the next decade.

Based in Seoul, South Korea, LG Energy Solution signed a multi-year binding offtake agreement with Smackover Lithium for battery-grade lithium carbonate on Monday. Under the contract, Lewisville, Ark.-based Smackover Lithium will supply LG Energy Solution with 8,000 metric tons of lithium carbonate annually for 10 years.

“We are pleased to begin this partnership with Smackover Lithium, and the agreement marks another step toward establishing a solid and resilient supply chain that keeps our products competitive in key strategic markets,” Kang Yeol Lee, Procurement Center Leader of LG Energy Solution, said in a statement.

Under the contract, LG Energy Solution will secure lithium carbonate produced by the South West Arkansas (SWA) Project, thereby obtaining a key EV battery component that meets non-PFE (prohibited foreign entities) requirements under President Trump’s One Big Beautiful Bill Act.

The South West Arkansas (SWA) Project is the flagship lithium initiative of Smackover Lithium, a joint venture between Standard Lithium Ltd. (55%) and Equinor (45%), Norway’s national oil company. Based in Lewisville, Ark., the partnership operates in southern Arkansas near the Texas and Louisiana borders and spans about 30,000 acres of brine leases in Lafayette and Columbia counties, with the initial phase focused on the 20,000-acre Reynolds Brine Unit.

LG Energy Solutions, part of the South Korean industrial conglomerate LG Chem, was created in 2020 to focus exclusively on lithium-ion batteries for the EV market. It operates seven production facilities in the U.S., including three standalone sites, most of which already have established lithium-based battery production capacity.

By combining its strong U.S. manufacturing footprint with Smackover Lithium’s lithium carbonate, the South Korean manufacturing giant said it has secured a fully integrated local supply chain from sourcing to production.

“By bringing both battery production and sourcing to the U.S., we will deliver competitive and sustainable products to our customers driving the global energy storage and EV markets,” said Lee.

Smackover Lithium said it will produce its lithium carbonate using a direct lithium extraction (DLE) and purification process, ensuring a more sustainable supply of materials.

“We are excited to be entering into this agreement with LG Energy Solution, one of the world’s leading battery producers with a diverse and global customer base and a presence in many dynamic and growing industry segments,” said David Park, CEO of Standard Lithium. “We expect this to be the beginning of a long and mutually beneficial partnership whereby we will provide LG Energy Solution with a long-term supply of U.S.-based and sustainably produced battery-quality lithium carbonate.”

The Smackover Formation, a geologic structure extending under parts of Arkansas, Louisiana, Texas, Alabama, Mississippi, and Florida, is significant in lithium production. According to an October 2024 report by the U.S. Geological Survey, in coordination with the Arkansas Department of Energy and Environment, 5 and 19 million estimated tons of unproduced lithium reserves lie beneath this formation. This makes it a key area for potential lithium extraction and a focus of the current industry developments.

“If commercially recoverable, the amount of lithium present would meet projected 2030 world demand for lithium in car batteries nine times over,” the report states.

According to key industry experts, lithium production and investment in the Arkansas formation could surpass the Fayetteville Shale boon in the millennium’s first decade. Between 2008 and 2012, Fayetteville Shale companies like Chesapeake Energy, Southwestern Energy, and Exxon Mobil’s XTO Energy invested nearly $13 billion in Arkansas before the play fizzled out due to declining natural gas prices, according to an economic impact study by the University of Arkansas,

However, ExxonMobil and Chevron, the nation’s two largest publicly traded oil conglomerates, have announced plans to shift billions of dollars in investment to develop commercial-scale lithium in the Smackover Formation.

ExxonMobil is targeting its first lithium production for 2027 and is evaluating growth opportunities globally. By 2030, ExxonMobil said it aims to produce enough lithium to supply the manufacturing needs of well over a million EVs per year. The nation’s largest integrated oil giant said discussions with potential customers, including EV and battery manufacturers, are ongoing.

Chevron U.S.A. Inc., based in Houston and a subsidiary of the Fortune 100 oil conglomerate Chevron Corp., announced in June 2025 that it had acquired 125,000 net acres in the Smackover Formation from TerraVolta Resources and East Texas Natural Resources (ETNR) LLC. These two leasehold positions are also in the Smackover Formation, where Arkansas oil and gas regulators have approved new royalty rates for future development.

In addition to the Smackover Lithium partnership and ExxonMobil and Chevron’s entry into the South Arkansas lithium play, other major corporations, including PotlatchDeltic Timber, which was acquired by Rayonier Inc. for $3.25 billion in January, and multinational mining conglomerates such as Albermarle Corp. and Lanxess AG, have announced plans to invest billions of dollars in lithium production in the Smackover Formation.

Following today’s LG Energy announcement, Standard Lithium’s thinly traded shares jumped 14 cents or 5.3% to $2.69. Equinor’s American Depositary Shares were also up 2.3% at $42.33 in New York. The Norwegian multinational oil giant is just off its 52-week high of $43.46.