SWA Lithium has been awarded a provisional government grant of US$225M to develop its South West Arkansas lithium project, conditional on finalisation with the Department Of Energy (DOE). 

SWA Lithium is a joint venture between Standard Lithium (55%) and Equinor (45%). The project is located on the Smackover formation, an area in southern Arkansas in which several lithium developers interested, including ExxonMobil.  

Historically, the Smackover formation was used for the extraction of petroleum products and later bromine, but more recently attention has moved to the lithium contained within the formation’s brine resources. Developers aim to extract this lithium from brine reservoirs through Direct Lithium Extraction (DLE), which proponents claim will mitigate the need for large land footprints and arid climates that solar evaporation requires, but remains a technology faced with significant technical challenges.  

The government’s decision to award grants to projects like SWA's Southwest Arkansas Lithium Project is part of a long-term strategy to bolster domestic lithium production and processing. This funding aligns with the wider governmental strategy to reduce reliance on foreign imports and strengthen the domestic supply chains for critical raw materials.  

Currently, the US is a minor lithium producer, producing just 16.3kt of LCE (Lithium Carbonate Equivalent) in 2024. Its reliance on imports is seen as a strategic vulnerability, especially as global demand for lithium is projected to grow over the next decade as geopolitical tensions rise. 

The grant will support the construction of the central processing facility that will support the Phase 1 (22.5ktpa LCE) capacity project.  The US government aims to mitigate this vulnerability by supporting projects that can establish a secure, domestic supply chain.  By increasing local lithium production, the US seeks to avoid potential disruptions in the supply of this critical mineral, which could hinder the country’s transition to renewable energy and EV adoption. 

Project Blue forecast supply from the US to hit 276.0kt of LCE by 2030. However, significant investment from the public and private sector will be needed to achieve any progress towards self-sufficiency.