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EnergyX, backed by GM, buys land rich in lithium deposits in the US Smackover Formation

EnergyX, a lithium-technology startup backed up by General Motors has purchased 35,000 acres from Pantera Lithium in the Smackover Formation. This is the latest deal to gain access to the brine formation of the United States, which is teeming full of supplies for the battery metal. EnergyX, a privately-held company, now owns roughly 47,500 acres of the Smackover formation, a geological formation that stretches from Florida to Texas and is filled with brine rich in lithium. The deal also shows the increasing interest in increasing U.S. metal production despite the low market price. Chevron has purchased Smackover land in recent weeks, joining Exxon Mobil and other companies with stakes in the area. Analysts estimate that the Smackover may contain over 4 million metric tonnes of lithium. This is enough to produce millions of electric cars and electronic devices.

EnergyX has agreed to pay A$40m ($26.1m) for the land in southern Arkansas. The deal includes A$6m in cash and 2.3m shares of EnergyX, which the companies value at A$14.50 each. EnergyX, controlled by Teague Egan as CEO, has previously discussed a listing. Pantera, who had originally agreed to purchase the acreage by 2023, will become a minority investor in EnergyX once the deal is closed, expected in the latter part of this year.

EnergyX will also build a refinery to process the lithium in Smackover brine. The company hopes to produce 12,500 metric tonnes of lithium annually by 2028, and 30,000 by 2030. GM has the first right of refusal to purchase lithium from any EnergyX project. GM led a $50-million financing round in 2023. Direct lithium extraction (DLE) is the only way that all companies can extract lithium from Smackover. This has never been done commercially before.

EnergyX must also apply to Arkansas officials for a rate for lithium royalties. In recent weeks, Arkansas officials have approved rates for nearby projects of Standard Lithium and Exxon. EnergyX attempted to purchase Galan Lithium assets in Argentina last year, but failed. EnergyX is backed by a consortium led South Korean conglomerate Posco Holdings. EnergyX also has a lithium development project in northern Chile.

(source: Reuters)