23 Jul Mississippi’s Critical Minerals, the Smackover Formation, and Lithium… by Garrett Wilkerson

With increased attention to critical minerals and the potential recovery of lithium from produced brines, stakeholders are reviewing the legal, financial, and regulatory frameworks necessary to position Mississippi as a player in an emerging industry.  Notably, the Mississippi Development Authority (“MDA”) recently issued a report (2026 Mississippi Natural Resources Summit: Critical Minerals in the State) detailing the findings and recommendations of several industry experts and policy makers in an attempt to bring Mississippi up to speed in the critical minerals space.  Much of this interest centers on the Smackover Formation, a prolific geologic interval extending from Texas, Louisiana, and Arkansas, and through central and southern Mississippi, demonstrating significant lithium-bearing brine potential.  However, before capitalizing on this resource, regulators and policy makers must address several unresolved issues, especially those involving existing property rights and ownership interests. 

Brine and Lithium

Of particular note, neither “brine” nor “lithium” are well placed in existing legal frameworks, much less in Mississippi.  Brine has been generally produced as a byproduct of oil and gas exploration, and Mississippi statute(s) currently classify it as a “waste” substance.  See Miss. Code Section 53-1-3.  Yet, the reality is that brine may contain commercially valuable concentrations of lithium, which is clearly not waste.  Thus, as noted in the MDA Report, the current legal framework creates “severe ambiguities regarding surface rights, mineral rights and pore-space ownership.”  Notably, no Mississippi court has ever considered whether brine, as a byproduct from produced water, is classified as a “mineral,” as that term is generally understood in the traditional oil and gas context. Thus, one basic question, among many, to resolve is when a deed, reservation, lease or conveyance refers to “minerals,” does that term include lithium, or other critical minerals?  

Conveyance of “Minerals” Include Lithium?

First, although there are several Mississippi cases addressing whether conveyances or reservations of “minerals” include additional or secondary substances (such as salt or bentonite), these decisions may be less instructive to the extent that newer extractions processes, as is the case with lithium production, do not neatly fit into older oil and gas assumptions.  See Cole v. McDonald, 236 Miss. 168, 109 So. 2d 628 (1959); Singer v. Tatum 171 So. 2d 134, 251 Miss. 661 (1965).  

Second, ownership questions may not turn only on whether lithium itself is a mineral; because lithium is extracted from produced water or brine, the analysis may also implicate water rights and ownership principles.  Historically, the State of Mississippi has historically asserted control over surface and groundwater resources, subject to certain rights of “use” of water; to the extent lithium may be recovered from produced water, traditional notions of “ownership” become more complicated. See Miss. Code Section 51-3-1.  It is worth noting that, in certain contexts, the right to use or ownership of subsurface waters belongs to the surface owner, except in the event it is tied to mineral production, when it is subject to the rights of the dominant mineral estate.  Moreover, although it stands to reason, as litigated in Texas, that ownership of brine, as incidentally produced from oil and gas operations as a waste byproduct, may belong to the mineral estate owner, the law in this area remains fluid and is highly fact-dependent.  See Cactus Water Servs., LLC v. COG Operating, LLC, No. 23-0676, 2025 Tex. LEXIS 591 (Tex. June 27, 2025).

Understandably, interested parties are unlikely to wait for courts to resolve these issues through piecemeal litigation. Accordingly, the Report recommends that the Mississippi Legislature and relevant regulatory agencies act promptly to establish a comprehensive statutory framework governing brine and critical mineral development. Among other measures, the Report calls for defining brine and its constituent elements as critical minerals, clarifying ownership interests, and creating predictable development and permitting regimes. Other states, including Louisiana, have already enacted legislation addressing some of these issues, including statutory provisions classifying brine as a mineral.  Until Mississippi adopts similar legislation, or its courts provide definitive guidance, substantial legal uncertainty remains, which may complicate title examinations, increase transaction costs, and delay investment decisions for operators, landowners, and other stakeholders.  Nevertheless, these questions also present an opportunity.  As interest in critical minerals continues to grow, the Magnolia State has an occasion to establish a clear and predictable framework before large-scale development arrives, and how those questions are answered may ultimately determine whether Mississippi becomes a meaningful participant in this emerging industry.

References:

2026 Mississippi Natural Resources Summit: Critical Minerals in the State.

Miss. Code Section 53-1-3. 

Cole v. McDonald, 236 Miss. 168, 109 So. 2d 628 (1959).

Singer v. Tatum 171 So. 2d 134, 251 Miss. 661 (1965). 

Miss. Code Section 51-3-1.

Cactus Water Servs., LLC v. COG Operating, LLC, No. 23-0676, 2025 Tex. LEXIS 591 (Tex. June 27, 2025).

Written by William Garrett Wilkerson, Senior Attorney at KMD Law.