Lithium Royalty Rate Makes Arkansas More Competitive

Arkansas is poised to be a leader in the lithium extraction and processing industries in the coming years. With a mature regulatory framework and an abundance of lithium reserves, Arkansas is already well-positioned for growth.

One of the key elements that will encourage continued growth and investment is a competitive lithium royalty rate. The royalty rate is the amount that will be paid to brine owners by companies that have extracted lithium from the brine in southern Arkansas.

In May 2025, the Arkansas Oil and Gas Commission approved the first lithium royalty rate in the state’s history. The Commission voted unanimously to set a 2.5 percent royalty rate for SWA Lithium, a joint venture between Standard Lithium and Equinor.

“We thank the AOGC for granting royalty rate approval for Phase 1 of our SWA Project,” said Standard Lithium’s CEO, David Park, “Establishing a fair and equitable royalty will allow brine owners to be compensated while encouraging economic development of the state’s significant lithium resource.”

Since that time, the Oil and Gas Commission has approved two other companies for the same 2.5 percent royalty rate. Both ExxonMobil and TETRA Technologies were approved for this royalty rate. The Oil and Gas commissioned approved the royalty rate for Saltwerx, a subsidiary of ExxonMobil, in June 2025. TETRA was approved for its royalty rate in March 2026.

Establishing a competitive royalty rate was a significant milestone that is enabling global companies like ExxonMobile, Standard Lithium, Equinor, and TETRA to make investments in Arkansas. With this set rate, companies can now have confidence to scale up their operations and grow in the Natural State.

South Arkansas is home to the largest concentration of lithium in North America: the Smackover Formation, which contains an estimated 5 to 19 million tons of lithium. The low-end estimate of the lithium supply in the Smackover Formation is more than nine times the projected global lithium demand for electric vehicles in 2030, according to a 2024 U.S. Geological Survey study.