Standard Lithium and Lanxess have signed a development deal for the lithium processing project in Arkansas, and will work towards completing a definitive feasibility study by the December quarter.

Standard Lithium will create a project company that will own 100% of the project up to and including the completion of the Front End Engineering Design (FEED) study.

Standard Lithium will also retain full ownership of its South West Arkansas lithium project, as well as all its proprietary extraction technologies and intellectual property.

The Arkansas lithium production plant will mark the first new production of commercial lithium in the US in over 50 years, Standard Lithium chief executive Robert Mintak said.

Under the agreement, Lanxess will provide the brine supply, as well as the project site lease and infrastructure for the project, which is based at the Lanxess facility in El Dorado, Arkansas.

Standard Lithium will control all development leading up to and including the completion of the FEED study.

Lanxess will have an option to acquire a 49% equity in the project company. If Lanxess acquires an interest, both companies will share construction costs on a ratable basis, and Lanxess will have the right to acquire some or all of the lithium carbonate off-take.

If Lanxess does not acquire an interest, Standard Lithium will own 100% of the project, and will be able to elicit bids from other companies to buy up to a 49% stake.

Lanxess will have the right to acquire some or all of the lithium carbonate produced at a market price minus up to 20%. The price will also take into consideration the costs of brine supply, site lease cost, and infrastructure.

Development of two additional properties held by Lanxess will be on a joint basis, and modeled on this arrangement.

Standard Lithium is also making progress with the South West project.

In January, Standard Lithium signed a Letter of Intent with Koch Minerals and Trading (KM&T) to purchase lithium chemical off-take and procure critical raw materials.