Lithium producers are arguing that they cannot afford high royalties (like the normal 12.5% paid oil and gas) and want lithium royalties to be limited to 2% or less. Or, use the lease system to pay royalty like the bromine producers do. They pay a flat per acre charge of around $60/acre per year. That metric was set 40 years ago when Bill Clinton was governor since no one knew quite how to value the mineral extracted from the depleted El Dorado oil fields. The annual payment is adjusted based upon an inflation metric so it has slowly increased over the years.
The brine is extremely ‘salty’ with an abundance of minerals relative to the usual oil field brines. With the discovery that lithium is extractable from the brines, the argument is how much royalty can the landowners afford. Landowners argue for a 12.5% royalty and the fight stands before the O & G Commission. Lithium companies are arguing that they cannot invest in this with such high royalties.
To me, as a geologist, I cannot say what the economics are but the rosy scenario these companies paint for their investors is a far contrast to the bleak projections they portray in front of the Commission.