LG Energy Solution Signs 10-Year Lithium Carbonate Offtake Agreement With Smackover Lithium
The binding contract covers 8,000 metric tonnes annually from the South West Arkansas Project, targeting first production in 2029.
LG Energy Solution has entered into a binding 10-year offtake agreement with Smackover Lithium to secure 8,000 metric tonnes of battery-quality lithium carbonate annually. The deal marks a significant step in LG’s strategy to establish a fully integrated local supply chain for its US operations.
What Happened
Smackover Lithium, a partnership between Standard Lithium and Equinor, will supply the lithium carbonate from its South West Arkansas Project. The material will be produced using direct lithium extraction (DLE) and purification processes. LG Energy Solution stated that the contracted material meets non-Prohibited Foreign Entity (non-PFE) requirements. This agreement is the second commercial offtake for the project, following a similar 10-year deal with Trafigura for the same volume. Together, these contracts account for approximately 90% of the 80% offtake target Smackover Lithium is seeking for the project’s initial phase, which has a nameplate capacity of 22,500 metric tonnes annually.
Why It Matters
For LG Energy Solution, this contract supports its goal of a local supply chain, aligning with its seven US production facilities, most of which already have capacity for LFP cells. Lithium carbonate is a key feedstock for LFP cathode material. The agreement also strengthens the financial position of the South West Arkansas Project, as offtake agreements are being pursued in conjunction with project financing. In a December 2025 update, the partnership reported indications of interest for project debt exceeding $1 billion from three export credit agencies. The project is aiming for a final investment decision in 2026 and expects first commercial production in 2029, with the supply term beginning at that time.
The Bottom Line
LG Energy Solution has secured a long-term, take-or-pay supply of lithium carbonate from a US-based source, bolstering its LFP cell production capabilities while aiding the development financing of the South West Arkansas Project ahead of its targeted 2029 production start.
