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LITTLE ROCK, Arkansas, Oct 30 (Reuters) - Arkansas faces stiff Chinese competition, sagging market prices and technological challenges as it vies to become the hub for U.S. lithium production, obstacles that state officials and industry executives said this week are surmountable. The southern state, the birthplace of former U.S. President Bill Clinton, sits atop the Smackover, an underground geological formation stretching from Florida to Texas filled with salty brines containing more than 5 million metric tons of lithium, according to the U.S. Geological Survey. Sign up here. That is enough lithium to make millions of electric vehicle batteries and other devices if the metal can be filtered using direct lithium extraction (DLE), something that has never before been done at commercial scale. LITHIUM PRICES PLUNGING Beyond technical challenges, Arkansas must contend with a lithium price drop of more than 80% in the past 18 months, according to Benchmark Mineral Intelligence, a fall fueled by oversupply from Chinese rivals. GOVERNOR SEES DLE SUCCEEDING IN STATE Roughly 860 people attended the summit, an increase of 15% from a similar event held last year. Arkansas Governor Sarah Huckabee Sanders said in an interview she is confident DLE can succeed. "Big companies like that don't put hundreds of millions of dollars into things if they don't feel like they see a path forward," said Sanders, who was press secretary for President Donald Trump during his first term and elected as governor in 2022. The governor said she does not believe the state's lithium industry needs government to guarantee a minimum price for its product - something Trump officials have discussed for critical minerals. Sanders added she does not think it is a disconnect that she wants Arkansas to be a major lithium producer but does not own an EV. "I don't own rockets, but it's still something we're really good at manufacturing," Sanders said, referring to the state's rocket industry. "I don't think you have to own a product to be able to make it in your state, to be able to sell it and to create an environment where those businesses can really do well." Reporting by Ernest Scheyder Editing by Rod Nickel Our Standards: The Thomson Reuters Trust Principles., opens new tab Ernest Scheyder is a senior correspondent covering critical minerals and the global energy transition, as well as the author of "The War Below: Lithium, Copper, and the Global Battle to Power our Lives," which was longlisted for the 2024 National Book Award and was named the American Energy Society’s Energy Book of the Year. He previously wrote about the U.S. shale revolution – drawing on a two-year stint based in oil-rich North Dakota – as well as politics and the environment. A native of Maine, Scheyder is a graduate of the University of Maine – where he was named a distinguished alumnus in 2021 – and Columbia Journalism School.
