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May 9, 2026 — A partial rebound in lithium prices and an increasingly assured long-term battery demand outlook are pushing US direct lithium extraction (DLE) projects toward construction after years of delays. The next several months will be pivotal: Lilac Solutions is preparing a final investment decision (FID) on a northern Utah facility, while Smackover Lithium — the joint venture between Norway’s Equinor and Canada’s Standard Lithium — is expected to do the same for its Arkansas project.
Lithium prices, which slid through 2023 and 2024 amid oversupply and uneven electric vehicle adoption, have turned higher in 2026. Battery-grade lithium carbonate contract prices have strengthened enough that some DLE project economics now clear internal hurdle rates. This is not a return to the speculative peaks of 2022, but for project sponsors the change has shifted the conversation from survival back to execution.
Direct lithium extraction separates lithium from underground brine using adsorbents, membranes, or ion-exchange resins. Unlike conventional evaporation ponds, which can take more than a year to concentrate lithium and require vast land areas, DLE can produce a lithium-rich stream in hours or days. That speed gives developers a way to bring new supply online with a much smaller physical footprint.
For the US, the appeal is strategic as well as economic. Domestic hard-rock lithium resources are limited, and the country has been slow to build refining capacity. DLE unlocks material in known oil-field brines, geothermal brines, and salty aquifers that were previously viewed as waste streams. This fits the broader government goal of expanding domestic critical mineral supply rather than remaining dependent on imported lithium chemicals.
Lilac Solutions, headquartered in California, has spent years developing its ion-exchange bead technology and demonstrated its process in pilots across North and South America. The company’s Utah project is designed to show that DLE can work in a temperate-zone environment with varying brine chemistry, a key test for the industry. A positive FID would make it one of the first commercial DLE plants in the US.
Smackover Lithium’s Arkansas project is built around one of the richest known lithium-bearing brines in North America: the Smackover Formation, which has been drilled for oil and gas for decades. The joint venture already produced battery-grade lithium carbonate through an existing pilot at a Lanxess facility. The company’s next step is to scale that demonstration into a full commercial plant, with engineering and financing work running in parallel.
Both projects have faced repeated schedule slips because of weak prices and project finance delays. Now that prices are more supportive, the focus is on securing equipment, final permits, and construction capital.
The same price recovery is intensifying competition from the oil and gas sector. Exxon Mobil has been leasing and testing brine acreage in Arkansas, with executives describing lithium as a natural extension of its subsurface capabilities. Chevron is working on DLE in geothermal brine in California’s Salton Sea region, which offers the added benefit of low-carbon power. Occidental has also positioned itself in the Salton Sea area, pairing extraction with its broader energy transition portfolio.
These companies bring drilling experience, reservoir knowledge, and large balance sheets. They also have lower tolerance for stranded assets, so they tend to move slower than small technology companies but enter with more capital certainty. That mix of startup agility and corporate muscle makes the current US DLE race more crowded than at any prior point.
Financing remains the biggest barrier, and DLE’s first-of-a-kind technology risk is still difficult for traditional lenders to price. Most projects cannot rely on commodity prices alone; lenders and equity investors want long-term offtake agreements, construction oversight, and a clear exit. The economics are also highly sensitive to lithium prices, so a price pullback of 20% could push some projects back to the drawing board.
State and federal support is helping fill the gap. Lithium is listed as a critical mineral by the US government, and the Inflation Reduction Act’s manufacturing incentives have made domestic battery supply chains more competitive. Federal loan programs are also available for critical mineral projects, although disbursement has been slower than many developers hope.
A notable new dynamic is procurement. Automakers and battery cell makers are competing to secure domestically sourced lithium in order to meet US content requirements and avoid supply-chain exposure. Some of that demand has already translated into preliminary offtake talks around DLE projects, a marked shift from the early 2020s when buyers preferred cheap Chinese material.
DLE is not a one-size-fits-all solution. A technology that works in one brine can struggle in another due to differences in magnesium, calcium, and impurity levels. Many developers have had to redesign process stages after pilot data revealed scale-up issues. Water use and brine disposal are also sensitive local issues; communities in Utah and Arkansas have raised concerns about geology and well interference.
Another risk is timing. Even if FIDs are reached this year, commercial production is unlikely before 2027 or 2028. In the interim, global lithium supply is still abundant, Chinese producers remain low-cost, and a demand slowdown could easily delay ramp-up plans. The industry has seen false starts before, and lenders have long memories.
The current recovery has opened a new chapter for US lithium production. DLE is no longer a laboratory curiosity or a series of pilot projects; it is being evaluated at commercial scale with a financial commitment deadline. The winning projects will be those that pair proven technology with favorable brine chemistry, community support, and patient capital.
If lithium prices hold or rise further, the US could finally see its first dedicated DLE production within three years. If prices stall, the front-runners may still proceed, but broader industry enthusiasm could cool quickly. For now, the direction is clear: after years of delay, American DLE projects are moving again.
