Trafigura closed a binding purchase and sale agreement with Smackover Lithium, a joint venture formed by Standard Lithium and Equinor, to secure the supply of battery-grade lithium carbonate for a 10-year period. The contract represents more than 40% of the projected sales volume for the initial phase of the South West Arkansas Project (SWA Project), which will have an estimated annual production capacity of 22,500 tons.
The agreement establishes the annual delivery of 8,000 metric tons of lithium from the start of the project’s commercial production. Although the agreed prices were not disclosed, the parties indicated that they are structured to support comprehensive development financing, which is currently evaluating debt proposals for more than $1 billion.
An alliance between strategic leaders
Smackover Lithium is the joint development vehicle between Standard Lithium (55%) and Equinor (45%). With operations in Southwest Arkansas and East Texas, the firm is advancing the use of direct lithium extraction (DLE) technologies, positioning the SWA Project as one of the most promising sources of lithium in the United States.
For its part, Trafigura is consolidating its position as a key player in the global supply chain for critical minerals, including battery metals. With operations in more than 150 countries and expertise in energy and logistics markets, the company is strengthening its presence in North America by securing locally produced lithium.
Supporting US supply chains
This agreement represents a decisive step toward strengthening strategic mineral supply chains in the United States, reducing dependence on lithium imports from regions such as South America or Asia. According to Trafigura, lithium from the SWA Project will play a central role in providing materials for electric vehicle batteries and energy storage systems.
In addition to the agreement with Trafigura, Smackover Lithium is moving forward in negotiations with other potential buyers to commit up to 80% of the projected production volume. These contracts will be essential to reaching the Final Investment Decision (FID) and closing the full financing of the project.
Projections for 2026
Standard Lithium anticipates providing updates on new offtake agreements and FID plans in its next quarterly financial report, scheduled for late 2025. If the pending commitments are finalized, the SWA Project could enter construction in 2026, aligning with the strategic energy transition goals of both Standard Lithium and Equinor.
Source and photo: Smackover Lithium