Short seller alleges Standard Lithium technology does not work - Reuters

Feb 3 (Reuters) - Short seller Hindenburg Research on Thursday alleged that Standard Lithium Inc's plan to produce lithium for electric vehicle batteries in Arkansas is based on technology that does not work, sending the company's stock down 15%.

Hindenburg, which did not disclose the size of its short position, alleged that Standard's technology is "struggling out of the gate" and is based on patents that were rejected by U.S. officials.

Representatives for Vancouver-based Standard were not immediately available to comment.

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Short sellers sell borrowed shares in the hope of buying them back at a cheaper price and pocketing the difference.

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 hard rock mining and evaporation ponds, the 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 is running a pilot demonstration plant, but has not produced or sold commercial quantities of lithium.

Effectively, Standard promises to extract lithium from wastewater in a way that would have very little environmental footprint, a tantalizing prospect for investors and automakers.

Lanxess, though, believes Standard has yet to demonstrate the project's "proof of concept," Hindenburg said, citing unnamed Lanxess officials. A Lanxess spokesperson was not immediately available to comment.

Koch Industries Inc became Standard's largest shareholder last fall with a $100 million investment. Hindenburg said "Koch missed red flags and failed in its due diligence in its haste to deploy capital."

A Koch spokesperson was not immediately available to comment.

Hindenburg also alleged that Standard is part of a long-running stock promotion scheme by Chief Executive Officer Robert Mintak. Mintak was not immediately available to comment.