LG Energy Signs Lithium-Supply Deal With Smackover in Arkansas

LG Energy Solution Ltd., one of the world’s biggest makers of lithium-ion batteries, has agreed to buy a key raw material from Smackover Lithium.

The deal will supply LG with 8,000 tons of battery-grade lithium carbonate annually for a decade beginning in 2029, according to terms announced Monday.

Smackover is a joint venture of Norwegian oil driller Equinor ASA and Standard Lithium Ltd. that is aiming to extract the critical mineral from ancient limestone shelves 2 miles (3.2 kilometers) beneath the piney forests and river valleys of Arkansas.

Lithium carbonate is a key input for lithium-iron-phosphate batteries that are gaining market share as lower-cost alternatives to nickel-based chemistries.

The LG deal is Smackover Lithium’s second offtake, following a similar agreement with Trafigura in March.

Together, the LG and Trafigura agreements account for roughly 90% of the project’s expected annual offtake, Standard Lithium Chief Executive Officer David Park said in an interview. A third agreement is expected soon that would reduce equity-financing requirements, he said.

LG is keen to expand its footprint outside the traditional market for lithium batteries — electric vehicles — to the artificial-intelligence space, Park noted.

“There’s no data centers without energy and energy storage,” he said. “And there’s no energy storage without lithium.” The company also is looking into military applications for its tech.

Most of the lithium used in the US today originates in Chile and Argentina, before it goes to China for processing. Reducing domestic industrial sectors’ exposure to foreign supply chains has been a key goal of the Trump administration.

Batteries are seen as an important backup for electricity-hungry data centers amid the AI-driven building boom.

“Our industry and the state of Arkansas are moving fast and some of the largest companies in the world are looking to Arkansas as a place where lithium is becoming the next big thing,” Arkansas Governor Sarah Huckabee Sanders said during an interview.