LG Energy Solution has committed to a decade-long, take-or-pay contract with Smackover Lithium to purchase 8,000 tonnes per year of battery-grade lithium carbonate from 2029. The lithium will be sourced from deep brine deposits in Arkansas, marking a significant expansion in US domestic lithium supply for the global battery market.
- 10-year binding lithium carbonate supply from Arkansas starting 2029
- Smackover Lithium joint venture between Standard Lithium and Equinor
- Follows a prior LG contract with Vulcan Energy in Germany
What happened
LG Energy Solution signed a binding take-or-pay agreement ensuring annual delivery of 8,000 tonnes of battery-grade lithium carbonate beginning in 2029. The supplier, Smackover Lithium, is a joint venture operated by Standard Lithium (55% stake) and Equinor (45%), a Norwegian state-controlled energy company. This deal is a strategic move to secure stable lithium supply from domestic US sources to meet increasing demand for battery manufacturing.
Smackover Lithium extracts lithium from brine located about two miles beneath the Arkansas surface through chemical processing, rather than traditional mining. This contract covers nearly 90% of Smackover’s targeted lithium offtake alongside a similar agreement with Trafigura, a major commodities trader. LG’s move complements a previous similar offtake agreement signed with Vulcan Energy in Germany which aims to start deliveries in 2025 but has faced project delays.
Why it matters
This deal represents a significant step in diversifying lithium supply chains outside traditional mining regions. With global battery demand growing rapidly, securing long-term, reliable deliveries of battery-grade lithium is critical for makers like LG Energy Solution. The US origin of the lithium supports efforts to establish domestic supply chains and reduce reliance on imports amid geopolitical uncertainties affecting critical materials.
Equally important, the extraction via brine in Arkansas highlights an innovative, less disruptive lithium production method compared to conventional mining. Meanwhile, Europe’s lithium industry remains heavily import-dependent, with the EU currently producing less than 0.1% of global lithium output and relying entirely on foreign processing, spotlighting opportunities for expansion. LG’s contracts in both US and Europe reflect efforts to build geographically diversified and sustainable lithium sourcing portfolios.
What to watch next
Industry watchers should track Smackover Lithium’s development progress and its ability to meet production targets starting in 2029, as well as the securing of final project financing and construction milestones. Monitoring how this new US lithium supply influences broader North American battery manufacturing capacity and supply security will be important in the coming years.
In parallel, attention remains on Vulcan Energy’s delayed German lithium project, especially as it targets commercial production by 2028. The evolution of recycling technologies and regulatory frameworks like the EU Critical Raw Materials Act will also shape market dynamics by potentially reducing raw material import dependencies and encouraging more circular lithium supply chains.