Dutch commodities trader Trafigura has signed a binding offtake agreement with Smackover Lithium to purchase battery-grade lithium carbonate from the South West Arkansas (SWA) Project in the United States.
Under the deal, Trafigura will buy 8,000 tonnes of lithium carbonate annually from the project once production begins. The agreement runs for 10 years, covering a total of 80,000 tonnes of material.
Smackover Lithium is a joint venture between Standard Lithium and Equinor. The project aims to extract lithium used in electric vehicle batteries from brine resources in the Smackover Formation in Arkansas.
The geological formation, formed from remnants of an ancient sea, contains porous limestone layers extending beneath several southern U.S. states, including Arkansas, Louisiana, Texas, Alabama, Mississippi and Florida. In recent years, the region has drawn interest due to lithium-rich brines associated with deep salt deposits.
Smackover Lithium plans to begin production in 2028, targeting 22,500 tonnes of battery-grade lithium carbonate annually.
Lanxess has previously tested Standard Lithium’s Direct Lithium Extraction (DLE) technology at a pilot facility located at its operations in El Dorado, helping to demonstrate the potential of lithium extraction from the Smackover Formation.
Gonzalo De Olazaval said the agreement strengthens the company’s involvement in North America’s critical minerals supply chain.
“We are pleased to have signed this offtake agreement with Smackover Lithium, further strengthening our North American critical minerals footprint. The SWA Project is expected to provide a reliable source of battery-grade lithium carbonate produced in the United States, enhancing domestic supply chains,” he said.
The deal reflects broader efforts by the United States Government to reduce reliance on imported battery materials, including lithium, which is essential for electric vehicle production.
U.S. policymakers have increasingly focused on supporting domestic lithium supply through funding programmes and incentives aimed at strengthening the country’s battery and critical minerals industries.