Lithium companies ask Oil and Gas Commission to postpone hearing on joint royalty application

After southern Arkansas landowners raised several legal objections to what they called a cut-rate offer on royalty rates, lithium companies responded today by defending their claim.

The Oil and Gas Commission was scheduled to consider royalty rates at a hearing on September 24, but lithium companies requested on Wednesday that the hearing be postponed to give the commission more time to consider the proposal before it. The Oil and Gas Commission today granted the lithium companies’ request for a postponement, meaning the hearing on the application will not take place on September 24.

In July, the five major lithium companies filed a request with the state Oil and Gas Commission to set an overall royalty rate of 1.82%. Landowners who lease their mineral rights to the companies, represented by a group called the South Arkansas Minerals Association, opposed the request.

The landowners argued that the application was “illegal” and that granting the application would violate the Administrative Procedure Act, among other legal remedies. But Lithium Companies hit back today, insisting that its application has a solid legal basis.

“The establishment of a lithium mining royalty is a critical component of what could be a new industry in Arkansas. Proper implementation would benefit everyone: a thriving lithium industry would benefit the state economy, the surrounding region, local communities, and create new jobs in southwest Arkansas,” a statement from Standard Lithium said. “We recently provided several legal and procedural clarifications to the AOGC and, to allow them to review and respond, we have requested a postponement of the hearing. It is prudent to allow sufficient time and should pave the way for a clear and competitive royalty structure that works in and for Arkansas.”

Lithium companies cannot continue to extract lithium for profit until the Oil and Gas Commission sets royalty rates for landowners.

Below is the press release from Standard Lithium:

The Arkansas Times newspaper contacted the Oil and Gas Commission and the South Arkansas Minerals Association for comment.

This story will be updated.