Monthly Archives: November 2023

Lithium – Look Before You Lease

The lithium boom of S Arkansas begs the question of how to pay the royalty owners. This is a problem as it is not like normal oil and gas production. The lithium carbonate is gleaned from the tailwaters of the bromine plants and so the owners are paid a per acre royalty there that is annually adjusted to an inflation index.

The Magnolia Reporter says “Lanxess Corporation and Standard Lithium subsidiary Arkansas Lithium Corporation are asking the state Oil and Gas Commission to create a method to determine royalties for lithium chloride, lithium carbonate or any other final product from their facilities.”

So how is the best way to determine the royalties? Who knows? Since the production may be quite variable how do you determine whose leases yielded what in the end? So paying an annual lease fee seems justified in fairness but OTOH, it may also mean you don’t share a portion of the takes with the operator but your royalty should be totally free of any “post-production” expenses.  If you want to comment upon the situation as a mineral owner then contact the Arkansas Oil & Gas Commission in El Dorado. No post production expenses… ever.