Pantera Lithium (ASX:PFE) has received a boost following the Arkansas Oil and Gas Commission’s (AOGC) approval of a 2.5% minimum lithium royalty structure for brine-based projects in the Smackover Formation. This royalty, initially applied to the Standard Lithium-Equinor joint venture, sets a commercial precedent for developers in the region, including Pantera. The 2.5% gross royalty is levied upon the production and sale of lithium carbonate or hydroxide, protecting early-stage economics. Pantera notes the royalty level is globally competitive, contrasting with increases in other jurisdictions that have undermined project economics and investor confidence.
Arkansas’s framework includes government and community support, with the CEO stating that the State enacted legislation to stimulate industries growth by offering a temporary severance tax exemption that will mean lithium producers are exempt from the state’s severance tax on saltwater brine from July 1, 2028, through June 30, 2033. A large portion of Pantera’s mineral leases are structured to align with the AOGC royalty regime, providing certainty and transparency. The company views this as strengthening its negotiating position with partners, funders, and downstream players. Pantera focuses on developing high-grade lithium brine resources in the Smackover Formation.
