GM-backed EnergyX buys lithium-rich acreage in US Smackover formation

July 9 (Reuters) - EnergyX, the lithium technology startup backed by General Motors GM.N, has bought 35,000 acres (14,164 hectares) in the Smackover formation from Pantera Lithium PFE.AX, the latest deal for access to the U.S. brine formation teeming with supplies of the battery metal.

The deal boosts the holdings of privately held EnergyX to roughly 47,500 acres in the Smackover, an underground geological formation stretching from Florida to Texas filled with lithium-rich brine. It also underscores the growing interest in boosting U.S. production of the metal despite low market prices.

Chevron CVX.N in recent weeks has bought Smackover acreage, joining Exxon Mobil XOM.N, Albemarle ALB.N, Standard Lithium SLI.V and others with holdings in the region.

Analysts estimate the Smackover could contain more than 4 million metric tons of lithium, enough to make millions of electric vehicles and other electronic devices.

EnergyX's A$40 million ($26.1 million) agreement to buy the acreage in southern Arkansas from Australia-based Pantera includes A$6 million in cash as well as roughly 2.3 million shares in EnergyX that the companies are valuing at A$14.50 ($9.47) each.

EnergyX, which is controlled by CEO Teague Egan, has discussed a public listing in the past. Pantera, which itself had first agreed to buy the acreage in 2023, will be a minority shareholder in EnergyX after the deal closes, expected later this year.

Shares of Pantera more than doubled in Australian trading after the announcement. The deal "connects one of North America's most prospective lithium brine basins with EnergyX's advanced extraction tech and downstream ambitions," said Barnaby Egerton-Warburton, Pantera's executive chairman.

EnergyX is also building a lithium refinery in nearby Texas that will process lithium from the Smackover brine. The company aims to be producing 12,500 metric tons of lithium per year by 2028 and 50,000 metric tons per year by 2030.

GM, which led a $50 million financing round for the company in 2023, has the right of first refusal to buy lithium from any project that EnergyX develops.

All of the companies aiming to extract lithium from the Smackover will need to use direct lithium extraction (DLE), something that has never been done before at commercial scale.

DLE technologies could, if successful, produce the battery metal faster and cheaper than traditional evaporation ponds from brine deposits found throughout the globe, including in the Smackover.

Egan, who founded the company in 2018, described the push into the Smackover as a competition. "The race is on to see who will be the first to produce commercial battery-grade lithium," he said.

EnergyX will have to apply for a lithium royalty rate from Arkansas officials, who in recent weeks have approved rates for nearby lithium projects from Exxon and Standard Lithium.

EnergyX tried unsuccessfully last year to buy Galan Lithium's GLN.AX assets in Argentina. A consortium led by South Korean conglomerate Posco Holdings 005490.KS is an EnergyX investor.

EnergyX is also developing a lithium project in northern Chile.

($1 = 1.5328 Australian dollars)