Lithium mining is booming in Arkansas, despite not being known for its oil reserves.

The momentum of lithium production in the U.S. is growing in Arkansas, with companies such as , Albemarle, and investing heavily in the state.

With the increasing demand for lithium due to electric vehicles and energy storage, global lithium consumption has been steadily rising. In 2023, the world consumed 180,000 metric tons of lithium, up from 142,000 metric tons in 2022, according to the United States Geological Survey. However, the U.S. only produces less than 1% of the world's lithium supply. While most of the world's lithium still originates from countries such as Australia, Chile, and China, Arkansas has the potential to change that.

The Smackover Formation, a geological formation rich in lithium brine, makes the state a great region for lithium resource quality, according to Wesley Hamilton, CTO and vice president of research and technology at Albemarle, the world's top lithium producer. The concentration of lithium and the ability to extract it efficiently from the brine are the two factors that make this region stand out.

The formation in Arkansas, which has been used to extract bromine, now holds over 4 million metric tons of lithium, making it attractive to companies seeking to exploit its potential for powering electric vehicles and devices.

In 2023, Exxon Mobil acquired 120,000 acres in the Smackover Formation and aims to start producing battery-grade lithium by 2027. The company plans to produce enough lithium to supply the manufacturing of more than 1 million EVs per year by 2030. Meanwhile, Standard Lithium, which has been operating in Arkansas since 2020, is expanding its Direct Lithium Extraction (DLE) facility in El Dorado with a $100 million investment from Koch Strategic Platforms. DLE is considered a more eco-friendly extraction method, utilizing advanced filters to reduce energy and water usage.

However, the road ahead isn't without challenges.

Although DLE technology holds promise, it has not been extensively tested on a large scale. Additionally, lithium prices have significantly decreased from over $80,000 per metric ton in 2022 to approximately $10,600 today. This is due to an oversupply of lithium, slower-than-anticipated EV growth, and the emergence of new battery technologies, as stated by Benchmark.

"The falling lithium prices and lack of revenue generation for standalone lithium companies pose a significant challenge for companies looking to scale up, according to Shon Hiatt, director of the Business of Energy Transition Initiative at the University of Southern California."

The Atlantic Council reports that China produces 80% of global battery cells, which raises concerns about U.S. supply chain risks.

Standard Lithium CEO Robert Mintak stated that the United States must increase its efforts to become a significant player in the global lithium market, as the company has targeted the Smackover formation in Arkansas due to its belief that it is the best resource to develop.

Learn how Arkansas is leading the way in U.S. lithium production and its implications for the energy market by watching the video.