We’ve been pushing our political leadership to get on board with the development of South Arkansas’ nascent lithium industry. Fortunately, private industry is available and interested in giving lithium a big push. So comes the news that Koch Investments Group is fronting Standard Lithium with a $100 million investment for the development of its lithium production plans in South Arkansas. CLICK HERE to see the details. The money will help Standard Lithium do three things. First, it will build out its lithium production facility at the Lanxess facility in El Dorado. Second, it opens the way for Standard Lithium to work with Koch subsidiaries to develop and commercialize brine-to-lithium technology. Third, and this is the big one, Koch will help Standard Lithium speed up the development of Standard Lithium’s South West Arkansas Lithium Project. The latter is Standard Lithium’s proposal to use Tetra Technologies brine leases in western Columbia County and eastern Lafayette County to feed a second lithium production facility. Standard Lithium said last month that with a 25 percent contingency fund, a capital investment of $870 million would be required should the company decide to proceed. Well, an $870 million investment won’t be possible for Standard Lithium without outside involvement. But $870 million is pocket change to Koch Investments’ parent company, Koch Industries. Koch is the largest privately-held company in the nation with annual sales of more than $115 billion. You may not be familiar with Koch, but you are likely familiar with one of its companies that already had a big footprint in our region – Georgia-Pacific. The Koch investment represents a big stamp of approval on Standard Lithium’s efforts in South Arkansas.
So far as we know, Koch Industries had expressed little interest in lithium until recently. A Google search turns up news that in October, Koch Strategic Platforms created a joint venture with Europe’s Freyr Battery to make lithium-ion battery cells in the U.S. for electric vehicles and stationary energy storage systems. According to S&P Global Market Intelligence, “The companies invested $70 million into Massachusetts-based battery developer 24M Technologies Inc. as part of their agreement to create 50 GWh of cell production at one or several sites to be selected in 2022. The venture partners also secured a limited exclusive license to use 24M's technology in the U.S., building on Freyr's license to produce cells at a series of planned factories in Europe, using 24M's recipe.” Also in October, the Financial Post said that Koch Strategic Platforms made a $100 million investment into Li-Cycle Holdings Corp. of Mississauga, Ontario. Li-Cycle converts lithium battery scrap into feedstock for new electric vehicle batteries.
It was only a few days ago in this column that we repeated our call for local and state economic leaders to get more involved with the prospects for the further processing of South Arkansas lithium into the actual products that people use. Lithium’s real value is as a product that can be sold, such as the batteries for electric vehicles. If the extraction of lithium from South Arkansas brine is the only involvement we have in the supply chain, our residents can rightly claim a form of economic exploitation of our resources. If we are going to have lithium production, we want our share of further processing as well in the form of lithium battery makers and related industries. That is a job for our local political and economic development leadership. And we’re watching.
One wonders about the conversations held this week inside Albemarle Corporation’s Lithium Division following the Standard Lithium-Koch Investments Group announcement. During last summer’s quarterly financial conference call, Eric Norris, head of Albemarle’s Lithium Division, said the production of lithium from South Arkansas brine has potential drawbacks due to quality issues. During the fall financial call, Albemarle CEO Kent Masters said that in Magnolia, “We are evaluating the process technologies to leverage our brines to extract lithium.” We can only presume that Koch Investments Group got a good look at Standard Lithium’s data about the lithium quality potential from its Tetra Technologies leases – at least enough to say that Koch should spend several million dollars to study the options. If Albemarle dives into lithium production from its brine fields in Columbia and Union counties, it will have a major economic impact in our immediate area.
In an earlier draft of the first paragraph of today’s column -- which did not make its way into print -- we accidentally used the word “lignite” for “lithium.” A mental slip on our part but also wishful thinking. Columbia County and South Arkansas has lots of lignite, too. Unfortunately, there’s little interest or demand for this moist form of coal that’s now looked upon as an “orphan” mineral. It can be used as fuel but coal has fallen from favor, and with good reason. More research is needed into the industrial use of lignite.
Tomorrow is Small Business Saturday. Be sure to visit Magnolia’s small businesses in your search for just-right Christmas gifts for your family. And hey, remember to get something nice for yourself, too.
There’s a lot of noise about what caused our current surge of inflation. Among the actual reasons was that $1.5 trillion in COVID-19 relief checks that the Republicans and Democrats in Congress, and a Republican and Democratic president, gleefully passed out. Many people needed the money to be sure. But there’s no doubt that giving people money for services they have not performed is inflationary. A real infrastructure program – money actually used to build needed projects and services that increase productivity – is not inflationary.