Trafigura, a global commodities trading company, has recently secured a binding take-or-pay offtake agreement with Smackover Lithium to procure battery-grade lithium carbonate from the South West Arkansas (SWA) project in the United States. This partnership marks a significant move towards enhancing US domestic lithium production and strengthening the supply chain for this essential mineral used in battery manufacturing and technological advancements.
Smackover Lithium, a joint venture between Standard Lithium and Equinor subsidiaries, will be supplying Trafigura with 8,000 tonnes per annum (tpa) of lithium carbonate for a period of ten years, totaling 80,000t. Deliveries are set to begin with the start of commercial production in 2028. The SWA project aims to initially produce 22,500tpa of battery-quality lithium carbonate, with plans for further expansion in the future.
The project will utilize direct lithium extraction technology to extract lithium from brine resources in the Smackover Formation in southern Arkansas. It is expected to reach its final investment decision (FID) by 2026, paving the way for increased domestic production of lithium in the US.
Standard Lithium CEO David Park expressed his enthusiasm about the agreement, stating, “The execution of this offtake agreement was the culmination of months of collaboration and negotiation and is a major milestone in moving the SWA project towards FID and construction. We are excited about the opportunity to collaborate with a strong industry leader like Trafigura and look forward to providing them with high-quality lithium carbonate to serve growing domestic and global markets in the coming years.”
Smackover Lithium’s initial phase aims to secure customer agreements covering approximately 80% of its annual nameplate capacity, with Trafigura’s deal representing more than 40% of the planned commitments. The joint venture is actively pursuing further agreements and engaging in an offtake process alongside project financing activities. Additional customer agreements are anticipated as part of preparations for the FID and close of project financing.
In November 2025, Smackover Lithium filed its first inferred resource report for the Franklin project in north-east Texas, US, indicating progress in their exploration and development efforts. The collaboration between Trafigura and Smackover Lithium signifies a strategic partnership towards meeting the growing demand for lithium in the global market.
This article, originally published by Mining Technology, highlights the importance of securing a stable supply of lithium from domestic sources to meet the increasing demand for battery-grade materials. The integration of Trafigura’s offtake agreement with Smackover Lithium into the SWA project underscores the commitment to advancing sustainable lithium production in the US.
