U.S. Department of Energy backs Southwest Arkansas lithium project with $225m grant

The Southwest Arkansas (SWA) lithium project, a groundbreaking joint venture between Standard Lithium Ltd. and Equinor, is set to revolutionize the U.S. lithium supply chain after securing a $225 million grant from the U.S. Department of Energy’s (DOE) Office of Manufacturing and Energy Supply Chains. This substantial funding will accelerate the development of a commercial-scale Direct Lithium Extraction (DLE) facility, positioning the project as a critical contributor to the nation’s clean energy ambitions.

How Will the SWA Project Transform U.S. Lithium Production?

With global demand for lithium surging due to its central role in electric vehicles (EVs) and battery energy storage systems, the SWA project aims to address a pressing need for domestic lithium resources. The processing facility, located in Lafayette County, Arkansas, will produce up to 45,000 tonnes of battery-grade lithium carbonate annually in two phases, each targeting 22,500 tonnes.

Equinor’s Executive Vice President for Technology, Digital, and Innovation, Hege Skryseth, emphasized that the DOE’s support underscores the project’s potential. “The U.S. Department of Energy’s backing demonstrates the maturity of the SWA project and strengthens its financial stability. We are committed to working alongside Standard Lithium to enhance the U.S. lithium supply chain with innovative technology,” she said.

What Makes Direct Lithium Extraction (DLE) a Game-Changer?

DLE technology distinguishes itself from traditional lithium mining by its environmentally responsible approach. Instead of mining lithium-rich ores, DLE extracts lithium from deep underground brine reservoirs. These reservoirs are unsuitable for drinking or agriculture, and the brine is reinjected into the subsurface after lithium extraction, minimizing environmental impact.

This method also produces a high-purity lithium concentrate that is converted into battery-grade chemicals using conventional processes. The SWA project’s deployment of DLE technology is expected to set a new benchmark for sustainability and efficiency in lithium production.

Why Is the SWA Project a Landmark Development for Arkansas?

The SWA project is poised to deliver significant economic benefits to Arkansas. With an anticipated 300 construction jobs and 100 permanent positions, the facility is set to provide long-term opportunities for local residents. Additionally, the project commits to hiring at least 40% of its workforce locally, fostering community growth.

Beyond employment, the initiative will support infrastructure improvements, healthcare access, educational partnerships, and workforce development programs. David Park, CEO of Standard Lithium, highlighted the importance of community engagement, stating, “Our goal is to ensure this project becomes a win for the Lewisville and southwest Arkansas communities. This means creating direct jobs while also contributing to broader community benefits.”

What Are the Next Steps for the SWA Project?

The SWA project is progressing rapidly, with a Definitive Feasibility Study (DFS) and Front-End Engineering Design (FEED) underway. These studies aim to refine the project’s technical and financial framework, with a Final Investment Decision (FID) expected by late 2025. If approved, Phase 1 production could begin as early as 2028.

A recent drilling program in the Smackover Formation has yielded promising results, revealing higher-than-expected lithium concentrations and improved reservoir characteristics. These findings will inform the ongoing DFS and FEED studies, ensuring the project’s design is optimized for commercial-scale production.

As a recipient of DOE funding, the SWA project is subject to the National Environmental Policy Act (NEPA). The project’s Environmental Assessment (EA), slated for completion in 2025, will evaluate potential environmental impacts and invite public input.

How Does This Project Fit into Broader Energy Goals?

The U.S. aims to reduce its reliance on foreign lithium sources, and the SWA project aligns perfectly with this strategy. By establishing a secure domestic supply of battery-grade lithium, the project will support the transition to renewable energy while enhancing energy security.

Equinor and Standard Lithium’s collaboration showcases how public-private partnerships can drive technological innovation and economic growth. The SWA project, one of the first of its kind in North America, demonstrates the potential for DLE technology to sustainably meet the rising demand for critical minerals.

The Southwest Arkansas lithium project represents a major milestone in the evolution of the U.S. lithium supply chain. Backed by significant federal funding and powered by innovative technology, the project is set to deliver economic, environmental, and strategic benefits. Its success could position Arkansas as a global leader in sustainable lithium production, paving the way for a cleaner, more resilient energy future.