Trafigura signs battery-grade lithium carbonate offtake agreement with Smackover Lithium, securing a long-term supply stream of a critical battery raw material as global competition for lithium supply continues to intensify. Under the binding take-or-pay agreement, Trafigura will purchase 8,000 metric tonnes per year of battery-grade lithium carbonate over 10 years, taking the total contracted volume to 80,000 tonnes.
The lithium will come from the South West Arkansas Project, being developed by Smackover Lithium, a joint venture between Standard Lithium and Equinor. According to the announcement, the project is targeting initial production of 22,500 tonnes per year of battery-quality lithium carbonate, with room for future expansion.
The timeline is also notable. Smackover Lithium is aiming to reach Final Investment Decision in 2026, while first production from the project is expected in 2028. That makes this more than a simple supply agreement. It is an early commercial signal that buyers are willing to lock in future battery-material volumes before the project enters production.
A key part of the story is the production method. The South West Arkansas Project plans to use direct lithium extraction (DLE) technology to recover lithium from brine resources in the Smackover Formation in southern Arkansas. DLE has been closely watched by the battery materials industry because it is positioned as a potentially faster and more efficient route to lithium production compared with some conventional extraction pathways, though its commercial scaling remains a major point of scrutiny across the sector.
From a broader market perspective, the agreement reflects how battery supply chains are being redrawn around security, regional diversification, and long-term availability. Lithium is now firmly at the center of the global battery economy, and offtake agreements like this show that trading houses, miners, and downstream customers are all moving early to secure reliable feedstock for future battery manufacturing demand.
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