Lilac and Traxys: Scaling Utah’s Lithium Production

Electrification continues to reshape global commodity markets, creating new pressures across the mining sector and battery manufacturing value chains.

For mining executives, procurement leaders and supply chain strategists, understanding these shifts could determine competitive positioning in an increasingly volatile marketplace.

A binding 10-year offtake agreement between Lilac Solutions and Traxys North America, formalised on 15 May 2025, highlights this transformation. The deal covers lithium carbonate production from Lilac's Great Salt Lake facility in Utah and could signal a fundamental change in how critical minerals move through North American industrial networks.

This partnership extends beyond standard commercial arrangements. It establishes a framework for de-risking domestic lithium extraction in the US while creating a defined procurement route for one of the most substantial near-term critical mineral developments in the western states.

10-year commitment secures production

Traxys, a global physical metals trader with annual turnover exceeding US$10 bn, will purchase 50,000 tonnes of lithium carbonate across the decade under the definitive agreement. This volume accounts for 100% of planned phase 1 production capacity from Lilac's Great Salt Lake operation.

The agreement follows a "take-or-pay" structure, with pricing mechanisms tied to market indices.

For Lilac, this arrangement provides the financial certainty needed to progress towards a Final Investment Decision (FID). For Traxys, it secures consistent access to battery-grade material in a market characterised by price volatility and supply constraints.

The commitment scale suggests growing confidence in domestic lithium production infrastructure. By securing the entire phase 1 output, Traxys is effectively supporting the project's commercial foundation while positioning itself in an increasingly competitive battery-grade materials market.

Direct lithium extraction advances

Lilac Solutions operates as a technology developer rather than a conventional mining operation. The company specialises in Direct Lithium Extraction (DLE), with its proprietary Gen 5 ion exchange technology offering potential alternatives to traditional extraction methods.

The technology achieved an 87% recovery rate during 2025 pilot operations. Unlike evaporation ponds, which can require up to 24 months to produce results, Lilac's process operates in hours. The method is described as "non-consumptive", with lithium-depleted brine returned to the lake, potentially maintaining water levels and reducing environmental impacts.

This technological approach translates into operational advantages. Traditional lithium extraction requires extensive infrastructure and extended processing periods, creating potential bottlenecks. DLE technology could allow producers to respond more quickly to market demand, adjusting output with minimal delays.

Domestic production capacity doubles

The Great Salt Lake phase 1 facility is designed to deliver 5,000 tonnes per annum (tpa) of battery-grade lithium carbonate. This single operation could nearly double current US production, representing a substantial development for companies seeking to diversify supplier bases away from international sources.

A planned phase 2 expansion aims to increase total capacity to 20,000 tpa of Lithium Carbonate Equivalent (LCE). At that scale, the project could produce nearly four times current domestic output, potentially reducing reliance on international imports.

"Securing offtake for 100% of planned output moves us closer to construction of a significant new source of domestic lithium," says Raef Sully, CEO of Lilac Solutions.

For battery producers and EV manufacturers, fragile and geographically concentrated supply chains have presented ongoing challenges.

By potentially doubling domestic output, this project could provide crucial support to battery manufacturing facilities currently under development across North America.

In US markets and increasingly across Europe, tax credits and subsidies are linked to mineral provenance, making domestic sourcing both a compliance requirement and a strategic imperative. Producing lithium within the United States could help manufacturers meet these requirements while reducing transportation costs and lead times.

The 10-year structure offers protection against spot market volatility, enabling improved long-term financial planning. By eliminating the need for extensive evaporation ponds and maintaining local water resources, Lilac's approach could establish new benchmarks for responsible sourcing.

Lilac has completed FEL-3 engineering for the facility and is currently working with Utah state regulators to finalise construction permits. The ion exchange media will be manufactured at Lilac's facility in Fernley, Nevada, creating a domestic supply chain while reducing dependency on international equipment suppliers.