Prairie Lithium (ASX: PL9) signs LOI with Stardust Power (Nasdaq: SDST) for U.S. refinery supply from 2027

Prairie Lithium Limited (ASX: PL9, OTC: PL9AF), the Canadian lithium development company focused on advancing its flagship project in Saskatchewan, has announced the signing of a non-binding offtake agreement with Stardust Power Inc. (Nasdaq: SDST), a United States-based battery-grade lithium refiner. Under the terms of the Letter of Intent, Prairie Lithium will supply Stardust Power with 6,000 metric tons of lithium carbonate equivalent annually, in the form of concentrated lithium chloride. These shipments are expected to begin as early as 2027, subject to final agreements and project execution timelines.

This cross-border supply deal is positioned as a strategic move to reduce North American dependence on foreign lithium conversion facilities, particularly those concentrated in China. By linking a Canadian lithium brine resource directly to a U.S. downstream processor, Prairie Lithium and Stardust Power are aligning with broader geopolitical and industrial policy goals aimed at securing resilient critical mineral supply chains within the continent.

The significance of the deal lies not just in the tonnage, but in the structure of the relationship. Both companies are focused on long-term integration of upstream and midstream capabilities, effectively building a closed-loop, regionally secure lithium supply chain. In the context of ongoing global battery production ramp-ups and growing electric vehicle adoption, this announcement comes at a time when lithium procurement has emerged as one of the key bottlenecks in energy transition strategies.

What are the technical and commercial details of the lithium chloride supply agreement?

While the current agreement is a non-binding Letter of Intent, it outlines the initial commercial structure of Prairie Lithium’s intended role as a long-term feedstock provider to Stardust Power’s refining operations in Oklahoma. Prairie Lithium will supply up to 6,000 metric tons of lithium carbonate equivalent annually, delivered in the form of lithium chloride concentrate. Lithium chloride is an intermediate product that can be further refined into battery-grade lithium carbonate, which is then used in cathode manufacturing for lithium-ion batteries.

The lithium chloride will be produced at Prairie Lithium’s project site in the Williston Basin, Saskatchewan. From there, it will be shipped to Stardust Power’s lithium refinery in Muskogee, Oklahoma. Stardust Power’s facility, currently under development, aims to produce up to 50,000 metric tons per year of battery-grade lithium carbonate, placing it among the most ambitious refining projects in the United States.

This type of cross-border vertical integration remains rare in the North American lithium market, where raw materials are often exported for offshore processing. The Prairie–Stardust partnership is thus seen as a foundational attempt to localize each stage of the lithium value chain—from brine extraction to battery-grade material production—within the region.

Though pricing and final commercial terms are yet to be disclosed, the move validates Prairie Lithium’s development strategy and demonstrates downstream demand for its brine-based lithium resource. Moreover, by forming a relationship with a U.S.-listed refiner, Prairie Lithium improves its market credibility and potential access to capital for scaling operations.

How does the Prairie Lithium project align with environmental and infrastructure goals in Saskatchewan?

The Prairie Lithium Project is located in Saskatchewan’s Williston Basin, a geologically favorable region with established access to infrastructure, including power, water, roads, and rail. These logistical advantages provide cost and efficiency benefits when compared to more remote resource operations, particularly in South America’s lithium triangle or parts of Western Australia.

Prairie Lithium has outlined a development approach that emphasizes sustainability. The company aims to minimize the use of freshwater, reduce land footprint, and adopt clean extraction technologies. While full-scale environmental impact data will become clearer as the project advances into construction and production phases, this ESG-oriented narrative could position Prairie Lithium favorably for future government support and investor capital that prioritizes low-carbon mineral sourcing.

Saskatchewan itself is considered one of the most mining-friendly jurisdictions in the world, with a stable regulatory regime and proactive provincial government policies promoting energy transition minerals. These factors collectively de-risk Prairie Lithium’s operations and make it an appealing partner for both domestic and foreign refiners such as Stardust Power.

What role does Stardust Power play in reshaping lithium refining capacity in the United States?

Stardust Power Inc. is a United States-based developer of lithium refining infrastructure, with its flagship facility under development in Muskogee, Oklahoma. Once operational, the refinery will have a production capacity of up to 50,000 metric tons of battery-grade lithium carbonate per annum, making it one of the largest planned conversion facilities in the United States.

Stardust Power has positioned itself as a key participant in the Biden Administration’s push to onshore lithium refining and reduce strategic dependencies. The company is also reportedly aligned with Department of Energy funding initiatives under the Loan Programs Office and may qualify for tax incentives tied to the Inflation Reduction Act and Bipartisan Infrastructure Law, though no official funding has been disclosed.

By securing a non-binding supply agreement with Prairie Lithium, Stardust Power is laying the groundwork for early-stage procurement stability. The refinery, which is still under construction, will require multiple feedstock partners to meet its full capacity. However, Prairie Lithium’s early engagement positions it as a lead supplier, strengthening Stardust Power’s execution roadmap.

The company’s leadership has also emphasized that building a resilient supply chain will require an ecosystem approach, where multiple stakeholders—from brine producers to refiners to battery manufacturers—collaborate to align capacity expansions and project financing.

How are institutional investors interpreting the offtake and what is the current sentiment?

In a lithium market characterized by price volatility, investor interest has shifted toward projects that demonstrate real downstream validation. Prairie Lithium’s agreement with Stardust Power is being interpreted as a de-risking milestone. Although non-binding, the Letter of Intent indicates genuine industrial demand for the company’s output and suggests a commercial pathway to monetization.

Analysts covering the sector note that offtake agreements, even at the LOI stage, often act as catalysts for equity re-rating, especially for junior developers. These deals can unlock further capital through debt and equity markets, improve credibility with government agencies, and act as leverage in future negotiations with strategic partners.

The sentiment surrounding Prairie Lithium has remained cautiously optimistic. Institutional investors are expected to closely monitor developments around finalizing the binding offtake contract, securing environmental permits, and progressing toward pilot-scale production. Meanwhile, Stardust Power’s public listing on Nasdaq provides a level of transparency and investor oversight that further validates the relationship.

With the United States Department of Energy ramping up funding for domestic lithium projects and broader investor awareness of North American supply chain bottlenecks, the alignment between Prairie Lithium and Stardust Power is being seen as an example of a broader structural realignment in the industry.

What could be the next strategic catalysts for Prairie Lithium and Stardust Power in 2025–2026?

The market will now look for several milestones. For Prairie Lithium, the conversion of the LOI into a binding offtake agreement will be the most immediate signal of project advancement. The company is also expected to provide updates on resource expansion, environmental approvals, and funding mechanisms.

For Stardust Power, progress on facility construction in Oklahoma will be closely watched, along with further offtake announcements, partnerships with battery makers, and any confirmation of U.S. government funding support. If the refinery successfully scales to its projected capacity, it could become a pivotal node in the U.S. battery material ecosystem.

Analysts will also monitor how both companies navigate permitting, supply chain logistics, and capex inflation, all of which remain key risks in the current macro environment. Nonetheless, the Prairie–Stardust partnership offers a compelling narrative around cross-border energy independence, and may serve as a blueprint for future lithium deals between Canada and the United States.