Commerce Secretary highlights multiple game-changers for Arkansas.
Arkansas Commerce Secretary Hugh McDonald calls the gigantic lithium deposit discovery in the Smackover Formation a game-changer for the Arkansas economy, but that’s not the only change coming to the state, he says.
Increasingly, people from all across the country are beating a path to the Natural State — and they are choosing to relocate for the career opportunities, quality of life and outdoor amenities that Arkansas offers, he said in a recent wide-ranging interview. Here is that discussion:
What is the ultimate impact of the huge lithium deposit recently discovered in the Smackover Formation?
MCDONALD: I think the potential is huge. It is a brand-new industry that has fallen into our lap. We have been pulling out brine for 60-plus years in the bromine sector. The largest lithium producer has been here for a long time: Albemarle. Technology for direct lithium extraction is new. World-class companies are here in the extraction sector. Many others across the globe are looking at the DLE technology. We believe that the research is going to prove that direct lithium extraction can be economical at scale. These companies would not be here if they did not believe it.
“There is a whole different vibe coming out of Arkansas now. We are trying to bring attention to what a great place this is.”
— Hugh McDonald, Secretary of Commerce, Arkansas
In the recent U.S. Geological Survey, they have talked about 5 to 19 million tons of lithium in the Smackover Formation — roughly nine times what is needed to meet U.S. demand over the next decade. There is no other place in North America that has this level of concentration as a resource. Our goal is not to just pull it out of the ground but look at it for both downstream and upstream opportunities. The EV market is in a slump right now for various reasons, but all indications are that this industry is here to stay. Arkansas can have a significant role in supplying other downstream products.
How is the steel industry progressing in Arkansas?
MCDONALD: Very well. We have steel fabrication. We have the whole materials sector. We have some of the most efficient and high-quality green steel plants in the world with the new Big River Steel and now U.S. Steel mills. The second big steel mill is starting up this week. NUCOR and Big River Steel will be up and running in Mississippi County. We will produce more steel in Mississippi County than any other county in the country. The late steel industry executive John Correnti called this place Steel Mill Heaven.
Do you foresee Arkansas making a play to get into the data center business?
MCDONALD: We are certainly talking to them. I expect that we will have some. I would also say that this is not a strategy for us to have data centers all over the state — because of the power capacity you have observed.
I used to run Entergy Arkansas. That whole industry sector uses a tremendous amount of power. I cut my teeth working on a nuclear reactor in Southern Louisiana. We have to have more nuclear generation in this country if we are going to get to a carbon-free energy future. About 65% of the energy for Entergy Arkansas comes from nuclear power.
Over the last five years, Arkansas has been ranked as a top five state for people relocating to new homes. Why are they choosing to move to Arkansas?
MCDONALD: They are saying: I am tired of the rat race. I am tired of the stress. I am tired of the high cost of living. I am tired of the whole metroplex way of living. Arkansas has done a pretty good job of telling its story from a tourist perspective. Northwest Arkansas has done a better job of talking about its quality of life and from a recreation standpoint. That region of the state has been one of the fastest growing regions of the country for the past 20 years. I have a daughter and son-in-law who moved from Houston to Bentonville. It is like they have died and gone to heaven. They love the outdoors. They found a great place to live. Their home has doubled in value in the last five years.
People are also moving here for the value. Little Rock was ranked by Realtor.com as the No. 3 place in the country for lowest cost of living. You can also get to anywhere you want easily here. You will see these trends in our middle-sized cities. Arkansas has lots of outdoor recreational activities. In my case, I can be at an outdoor preserve very quickly and easily.
How has the perception of Arkansas changed during your time here?
MCDONALD: The perception has indeed changed. Governor Sarah Huckabee Sanders is very pro-business. She is a millennial and she brings a new perspective to leadership. She promotes our outdoor opportunities every chance she gets. Bentonville and the Walton Family Foundation have led the effort to make Bentonville the mountain biking capital of the world. The Ozarks is the place to be right now. Arkansas has a cool factor that it did not have 10 years ago.
A lot of good things are happening here. I moved here 24 years ago for my career. We thought we might go back to Austin or to Minnesota, but we decided this is our home. Our kids all moved back here as well. This is a great place to live and a great place for business owners too.
What is Arkansas doing on the talent attraction front?
MCDONALD: We have been working on a talent attraction campaign for the past eight months or so. We will go live soon. We will look at veterans to start. That is a demographic that has been overlooked. These people are all well-trained and well-educated. This is just the first of many targeted areas. We will also reach out to millennials and target them for talent attraction. We will launch that campaign very shortly.
Are there any specific workforce development strategies that you would like to mention?
MCDONALD: Yes. One of the Governor’s main priorities is to get our workforce development better aligned with our workplaces. We have 48 higher-ed institutions around the state. Are they aligned to what employers need? Over the last two years, we have worked to get 2-year colleges more aligned and more directly focused on their customers. Their customers are the employers — not the students. Our goal is to get them more aligned with what employers need and want. We are making very good progress across the state.
Is there anything else you would like to say to the site selectors and CEOs who will be reading this interview?
MCDONALD: Yes. The Governor has placed a higher priority on supporting entrepreneurs in our state. Sam Walton was an entrepreneur from the very start. Tyson and Hunt were entrepreneurs. William Dillard of Dillard’s and Charles Murphy of Murphy Oil and Jack Stephens of Stephens Investment Banking were all entrepreneurs before they became global iconic names. Within state government, we are doing more work and doubling down on supporting entrepreneurial organizations. We are getting chambers of commerce across the state more engaged in supporting entrepreneurs.
Entrepreneurs are people we love to recruit as well. We have done a great job in Northwest Arkansas of recruiting people and companies in the outdoor recreation economy. Arkansas has had a perception of not being the most positive location. I do believe that is changing. There is a whole different vibe coming out of Arkansas now. We are trying to bring attention to what a great place this is. We are at a turning point with the external perception of the state. People are coming here of their own volition.
“Take the risk to start up a new business and grow your business here, and you will be rewarded for choosing to make that investment.”
— Hugh McDonald, Secretary of Commerce, Arkansas
We are working on strategies to create more economic development sites and tweaking our energy policy to encourage more energy projects with an all of the above energy focus to meet the growing energy needs of the state. So, my message is simple and direct: Take the risk to start up a new business and grow your business here, and you will be rewarded for choosing to make that investment.
Hugh McDonald, Secretary of the Arkansas Department of Commerce.
Photo courtesy of AEDC
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