Smackover Lithium, a joint venture between Standard Lithium Ltd. and Equinor, has received unanimous approval from the Arkansas Oil and Gas Commission for a 2.5% royalty rate on the Reynolds Unit, part of the first phase of its South West Arkansas Project. The project is located in Lafayette and Columbia counties.

The commission’s decision marks the first time a royalty rate has been approved for lithium extracted from brine in the state, setting a precedent for future lithium developments. SWA Lithium LLC submitted its request for a quarterly gross royalty of 2.5% earlier in May.

In addition to this newly approved lithium royalty, brine owners will continue to receive an annual “in lieu bromine royalty” of $65.05 per acre. Together, the compensation totals an estimated 3% of current lithium prices, combining both the brine fee and the lithium royalty.

Approval came during a special hearing held May 29 in Magnolia. Company leaders welcomed the decision as a meaningful step for the project and the industry.

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

Allison Kennedy Thurmond, Equinor’s vice president for U.S. lithium, also praised the decision, emphasizing the broader economic implications.

“The AOGC’s decision to grant a reasonable royalty for Phase I of our SWA Project demonstrates the state’s commitment to landowners and lithium development,” she said. “The royalty rate is only the beginning of capital investment and moves us one step closer to our final investment decision.”

Once fully operational, the Reynolds Unit is expected to produce 22,500 metric tons per year of battery-grade lithium carbonate, a critical material for electric vehicle batteries and renewable energy storage. Commercial production is targeted for 2028.

The royalty approval signals growing momentum for lithium development in Arkansas, where companies are aiming to tap into the state’s vast brine resources as the United States moves to strengthen domestic supply chains for critical minerals.

Smackover Lithium’s South West Arkansas Project represents one of the most advanced lithium-from-brine projects in North America, and the AOGC’s decision may influence royalty structures for other projects in the region.