ExxonMobil to drill for lithium in US

Oil major to lean on its subsurface expertise to expand a foothold in critical mineral mining

ExxonMobil to drill for lithium in US
ExxonMobil is evaluating further growth opportunities in lithium production

Oil and gas major ExxonMobil will begin producing lithium from a well in the US from 2027 as part of a new plan to become a leading producer of the metal.

In early 2023, ExxonMobil acquired the rights to 120,000 gross acres of the Smackover formation in southern Arkansas – considered one of the best lithium resources of its type in North America. 

The company will use conventional oil and gas drilling methods to access saltwater brines in reservoirs 10,000 feet underground, and then use direct lithium extraction (DLE) technology to separate lithium from the saltwater.

The lithium will then be converted to battery-grade material on site, and the remaining saltwater re-injected into underground reservoirs.

“This landmark project applies decades of ExxonMobil expertise to unlock vast supplies of North American lithium with far fewer environmental impacts than traditional mining operations,” says Dan Ammann, president of ExxonMobil Low Carbon Solutions. 

Amman says discussions with potential customers for offtake, including EV and battery manufacturers, are ongoing.

Lithium is essential to the production of lithium-ion batteries, which are used in consumer electronics, energy storage systems and — most widely – EVs.

Under the IEA's Sustainable Development Scenario, lithium demand increases by a factor of 40 between 2020 and 2040 as demands for these products grows.

ExxonMobil is evaluating further growth opportunities in lithium production globally, and aims to be producing enough lithium to supply the manufacturing needs of 'well over' 1 mn EVs per year by 2030.

The firm's move into lithium production is the first by a leading oil producer, and reflects the company's desire to focus on molecules rather than electrons.

"With the opportunity in Smackover...it has got a much, much lower environmental impact than the current production process for lithium. It fits very well with our capabilities. And the cost-of-supply curve is very competitive," said CEO Darren Woods on the firm's third quarter results call last month.

Woods went on to note his firm's expertise in well drilling. "It is very synergistic with our traditional businesses," he added.

Most lithium is currently mined in Australia and South America. But the Biden Administration has been keen to encourage firms to develop critical mineral supply chains in the US.

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