How Lilac & Traxys are De-Risking US Lithium Supply Chains

The global push towards electrification is reshaping supply chains in new ways every day. It touches every industry, but has particular consequence for leaders across EV manufacturing and mining, as well of course as supply chain and procurement.

Now a new partnership between Lilac Solutions and Traxys North America is further exposing this critical shift. 

On 15 May, 2025, the two firms formalised a binding 10-year offtake agreement for lithium carbonate produced at Lilac's Great Salt Lake facility in Utah, signalling a significant shift in how critical minerals flow through North American supply networks.

The deal extends beyond a conventional commercial contract. It represents a strategic move to de-risk domestic lithium production in the United States and establishes a clear procurement pathway for one of the most significant near-term critical mineral projects in the West.

Securing long-term offtake volumes

Under the terms of the definitive agreement, Traxys – a global leader in physical metals trading with an annual turnover exceeding US$10bn – will purchase 50,000 tonnes of lithium carbonate over a decade. This volume represents 100% of the planned Phase 1 production capacity from Lilac's Great Salt Lake site.

The agreement is structured as "take-or-pay", with pricing mechanisms linked to market indices.

For Lilac, this provides the financial certainty required to move towards a Final Investment Decision (FID). Meanwhile, for Traxys, it secures a reliable, long-term supply of battery-grade material in a market often characterised by volatility.

From a procurement perspective, this model demonstrates how binding offtake agreements can stabilise supply chains that have historically been subject to price swings and availability constraints.

The scale of this commitment reflects growing confidence in domestic lithium production capabilities. By locking in the entire Phase 1 output, Traxys is effectively underwriting the project's commercial viability whilst simultaneously securing its own position in an increasingly competitive market for battery-grade materials.

Technology reshaping extraction processes

Lilac Solutions is not a traditional mining company. It is a technology developer specialising in Direct Lithium Extraction (DLE). Their proprietary Gen 5 ion exchange technology offers a more efficient alternative to conventional methods, with implications for supply chain speed and reliability.

The technology delivered an 87% recovery rate during pilot operations in 2025. Unlike evaporation ponds, which can take up to 24 months to yield results, Lilac's process works in hours. The process is described as "non-consumptive", meaning lithium-depleted brine is returned to the lake, which maintains water levels and reduces the environmental footprint associated with traditional open-pit mines.

For supply chain managers, the speed of this extraction method means shorter lead times and more responsive production cycles compared to legacy processes.

This technological advantage translates directly into operational flexibility. Traditional lithium extraction methods require extensive infrastructure and long processing times, creating bottlenecks in the supply chain. DLE technology allows producers to respond more rapidly to market demand, adjusting output levels with minimal lag time and reducing the inventory buffers typically required in battery manufacturing operations.

Supply chain implications for manufacturing

The Great Salt Lake Phase 1 facility is designed to produce 5,000 tonnes per annum (tpa) of battery-grade lithium carbonate. This single facility is expected to nearly double current US production, a significant development for companies seeking to diversify their supplier base away from overseas sources.

A planned Phase 2 expansion aims to bring total capacity to 20,000 tpa of Lithium Carbonate Equivalent (LCE). At that scale, the project would produce nearly four times the current domestic output, significantly reducing reliance on international imports and shortening supply lines for North American manufacturers.

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

For EV manufacturers and battery producers, the primary challenge to mass adoption has been a fragile and geographically concentrated supply chain. By potentially doubling domestic output, this project provides vital support to battery manufacturing facilities currently under construction across North America.

In the US and increasingly in European markets, tax credits and subsidies are tied to the provenance of minerals, making domestic sourcing a compliance requirement as well as a supply chain strategy. Producing lithium within the United States helps manufacturers meet these requirements while reducing transportation costs and lead times.

The 10-year structure offers a buffer against the volatility of spot markets, allowing for better long-term financial planning and inventory management. Furthermore, by eliminating the need for vast evaporation ponds and maintaining local water levels, Lilac's approach sets a new standard for responsible sourcing, an increasingly important criterion in supplier selection.

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