Commodities trader Trafigura has entered into a binding take-or-pay agreement with Smackover Lithium to purchase battery-grade lithium carbonate from the South West Arkansas (SWA) project. Under this agreement, Trafigura will acquire 8,000 tonnes of lithium carbonate annually over ten years, totaling 80,000 tonnes. The project, a joint venture between Standard Lithium and Norway’s Equinor, is projected to begin production in 2028 and aims for an initial output of 22,500 tonnes per year of lithium carbonate.
The deal accounts for over 40% of the SWA project’s targeted production and employs direct lithium extraction technology from brine resources in the Smackover Formation. Industry analysts highlight that with rapidly increasing demand from electric vehicles and energy storage, the lithium market may face supply deficits as early as 2028 unless significant investments are made. According to Wood Mackenzie, demand could exceed 13 million tonnes by 2050 under a rapid energy transition scenario.
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