Trafigura has entered into a binding take-or-pay offtake agreement with Smackover Lithium, securing 80,000 tonnes of battery-grade lithium carbonate from the South West Arkansas Project (SWA Project) over a 10-year period. Under the agreement, Trafigura will purchase 8,000 metric tonnes per year of lithium carbonate, with deliveries set to commence once commercial production begins.
The SWA Project, a joint venture between Standard Lithium and Equinor, is targeting an initial annual output of 22,500 tonnes of battery-quality lithium carbonate, produced through direct lithium extraction technology applied to brine resources in the Smackover Formation in southern Arkansas. Smackover Lithium anticipates a Final Investment Decision for the project in 2026, with first production expected in 2028. There is also potential for future expansion beyond the initial production target.
By securing a long-term supply of domestically produced lithium carbonate, the agreement supports the development of the U.S. battery materials supply chain and helps strengthen national security for a critical mineral essential to electric vehicles and energy storage systems. The use of direct lithium extraction technology aims to improve resource recovery and reduce environmental impact compared to traditional evaporation methods.
Gonzalo De Olazaval, Head of Metals and Minerals at Trafigura, said the agreement enhances the company’s North American critical minerals footprint and provides customers in the region and globally with a reliable source of U.S.-produced battery-grade lithium carbonate. He added that Trafigura and Smackover Lithium look forward to collaborating on this strategic project.
The partnership underscores an industry trend toward securing stable sources of high-purity battery materials as demand for electric vehicles and renewable energy storage continues to grow. Direct lithium extraction projects like SWA are increasingly viewed as vital to meeting future market requirements while advancing sustainable production practices.
Source: Trafigura Press Release
