US-based company SWA Lithium, which is a jointly owned subsidiary of TSX- and NYSE-listed near-commercial lithium developer Standard Lithium and energy company Equinor, has been selected for up to $225-million award negotiation from the US Department of Energy (DoE).

This selection, overseen by the DoE's Office of Manufacturing and Energy Supply Chains (MESC), is one of the largest ever awarded to a US critical minerals project and is part of the second wave of funding under the Infrastructure Investment and Jobs Act aimed at expanding domestic manufacturing of all segments of the battery supply chain and increasing production of critical minerals in the US.

The provisional grant is dependent on completing successful final negotiations with the DoE.

The $225-million funding by the DoE will support the construction of the central processing facility (CPF) for Phase 1 of the South West Arkansas (SWA) project.

The CPF for Phase 1 is being designed to produce 22 500 t/y of battery-quality lithium carbonate, using direct lithium extraction (DLE) technology.

“This decision by the DoE validates the calibre of the project we are building through our derisked approach to project development, strong partnerships, methodical testing, and purpose-built processes tailored to meet the specific demands of large-scale lithium production in the Smackover Formation,” Standard Lithium CEO David Park said on Friday, adding that the US government's significant cost share highlights the strategic importance of developing a domestic supply chain for critical minerals.

The SWA project, located in Lafayette and Columbia counties, Arkansas, is being developed in partnership with Equinor, with ownership shared at 55% by Standard Lithium and 45% by Equinor.

The project’s design is being updated from its original prefeasibility study, and now targets a larger total output of 45 000 t/y of lithium carbonate, to be developed in two phases of 22 500 t/y each.

A definitive feasibility study and front-end engineering design are currently under way to support this expansion.

In addition to creating up to 300 construction and 100 direct jobs, the project is expected to benefit the local community through infrastructure improvements, community health initiatives, educational partnerships, and workforce development programmes.

“The US DoE’s support for the SWA project demonstrates how important lithium is to America’s energy transition. This award underscores the commercial readiness of our projects and the strength of our partnership," Equinor US lithium VP Allison Thurmond said.

“This funding is a strong endorsement of the SWA project and our efforts to develop a secure and sustainable domestic lithium supply chain. The grant will enable us to accelerate the development of this world-class resource and position the project as a cornerstone of the US battery materials industry,” Standard Lithium president and COO Dr Andy Robinson added.