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Reuters reports that a short seller has alleged that Standard Lithium's technology does not work.


Feb 3 (Reuters) - Short seller Hindenburg Research alleged on Thursday that Standard Lithium Inc's plan to produce lithium for electric vehicle batteries in Arkansas is based on technology that does not work, sending Standard's shares down 27%.
Hindenburg, which did not disclose the size of its short position, alleged that Standard's technology is "struggling out of the gate" and based on patents that were rejected by U.S. officials.
Standard, based in Vancouver, pushed back against the allegations, noting that it has been operating a pilot facility in Arkansas to test its technology for more than 20 months and given regular public updates.
Standard Lithium stated that it is confident in its lithium extraction technology and that all of its patent applications are active and continue to be prosecuted.
Koch Industries Inc., which invested $100 million in Standard last fall and is its largest shareholder, also defended the company's technology.
As of Thursday, approximately 2.6% of Standard's 154.4 million outstanding shares were being used to short, according to Refinitiv data.
Blue Orca published a report similar to Hindenburg's last November casting doubts on Standard's technology, allegations that the company denied at the time.
Standard is part of a growing wave of companies attempting to use direct lithium extraction (DLE) technologies to produce the white metal at commercial scale. The technologies differ by company, but share the goal of using less land and groundwater than traditional ways to process lithium.
Standard has said its proprietary DLE technology uses an adsorption process to filter lithium from brine, which it sources from a Lanxess (LXSG.DE)bromine facility in Arkansas. The company has not produced or sold commercial quantities of lithium, but it plans to do so in the future.
Standard promises to extract lithium from wastewater in a way that would have very little environmental impact, a tantalizing prospect for investors and automakers.
Lanxess believes that Standard has yet to demonstrate the project's "proof of concept," Hindenburg said, citing unnamed Lanxess officials.
Lanxess did not provide a comment.
Hindenburg believes Koch acted hastily and failed to do its due diligence in deploying its capital.
Koch spokesperson Christin Fernandez disagreed, saying the company "conducted extensive due diligence and found Standard Lithium's technology a promising bright spot on the path towards lithium production here in the U.S." Fernandez added that the Kochs are "committed to American manufacturing and look forward to working with Standard Lithium to bring this technology to market."
Hindenburg also alleged that Standard is part of a long-running stock promotion scheme. Mintak declined to comment when reached by phone on Thursday.
Mintak's team is large and has a variety of skills, according to the company's press release.
Hindenburg's report claims that Standard has only spent C$1.7 million ($1.3 million) on research and development. Standard disputed that figure, noting it has spent about C$36.3 million to open the Arkansas pilot plant and another C$6.9 million to operate it.
Hindenburg has in the past targeted Nikola Corp, Lordstown Motors and other companies involved in the booming EV industry.
$1 is worth 1.2677 Canadian dollars.

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