Anson Resources (ASX:ASN) has successfully negotiated a reduction in the proposed royalty for its Green River Lithium Project in Utah. The Utah School and Institutional Trust Lands Administration (SITLA) has agreed to a scaled royalty rate, ranging from 1% to 5%, based on market prices of lithium carbonate and lithium hydroxide. This replaces the previously proposed flat 5% royalty on first marketable products.
Under the new agreement, Anson’s US subsidiary, A1 Lithium, would pay a 1% royalty at current lithium prices (just below US$9 per kilogram). The rate increases to 2.5% when prices exceed US$12 per kilogram, and then increases by 0.5% for every US$10 increment above US$15, up to a maximum of 5%. According to Anson, this is the first scaled royalty structure for lithium in the US and provides A1 Lithium with increased margins during periods of low prices while sharing upside potential during price surges.
CEO Bruce Richardson highlights that this royalty ruling, coupled with Utah’s Brine Conservation Act passed earlier this year, gives investors regulatory certainty. He also notes that some projects in other jurisdictions like Arkansas, are facing royalty disputes with landowners demanding rates as high as 12.5%. Anson has been actively collaborating with the Utah government in developing legislation to bolster the state’s burgeoning lithium sector. This legislative effort aims to provide a responsible and forward-looking framework for the development of Utah’s lithium-rich brine resources.
