Exxon launches lithium business, targets supply to 1 million EVs by 2030

ExxonMobil has announced plans to produce lithium from land in southern Arkansas, USA, that it acquired earlier this year, marking one of the first direct forays by legacy oil and gas companies into the new mineral.

In a release, Exxon said work had already begun for the first phase of the company's North America lithium production in the area, which is known to hold significant lithium deposits.

The product will be branded as Mobil Lithium, the company said. Exxon is targeting 2027 for its first lithium production and is evaluating growth opportunities in this space globally.

The company is already in discussions with potential customers, including EV makers and battery manufacturers, and expects to be producing enough lithium to meet the needs of over 1 million EVs a year by 2030, the company said. ETN had reported earlier that the oil major was holding talks with EV maker Tesla and conventional carmakers such as Volkswagen and Ford, as well as electric components and battery manufacturers such as SK On and Samsung.

Exxon had acquired the rights to 120,000 gross acres of the Smackover formation in southern Arkansas, considered one of the most prolific lithium resources of its type in North America, in early 2023. The region has a history of oil and natural gas production, and its geology is "well understood", said Exxon.

The company said it would use conventional oil and gas drilling methods to access lithium-rich saltwater present in reservoirs about 10,000 feet below its land parcel. It will then utilize direct lithium extraction (DLE) technology – which it has been exploring for some time now – to separate lithium from the saltwater.

The lithium will be converted onsite into battery-grade material, while the residual saltwater will be re-injected into the reservoirs under the ground. Exxon pointed out in its release that the DLE process favored by the company produces fewer carbon emissions than the conventional hard rock mining method of lithium extraction and requires significantly less land as well. DLE is also quicker at lithium extraction than current methods, with recovery rates of 60-80 percent against the current 40-60 percent. However, the technology is unproven at scale, so Exxon's interest should serve as a boost for its fortunes.

"Lithium is essential to the energy transition, and ExxonMobil has a leading role to play in paving the way for electrification," said Dan Ammann, president of ExxonMobil Low Carbon Solutions, said in a release. "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."

Ammann called the project a "win-win-win," adding that "It's a perfect example of how ExxonMobil can enhance North American energy security, expand supplies of a critical industrial material, and enable the continued reduction of emissions associated with transportation, which is essential to meeting society's net-zero goals." 

Virtually all lithium production today occurs outside of North America, with Australia and Chile being the top two producers. The mineral is essential in manufacturing lithium-ion batteries, which are today used to power everything from electric vehicles to consumer electronics, and also serve as stationary batteries in energy storage systems. 

Exxon estimates that global EV sales will climb almost 25 percent and demand for lithium quadruple by 2030. The company projects demand for petrol and diesel from light-duty vehicles is likely to peak around 2025, before steadily decreasing to early-2000s levels by 2050. 

Exxon isn't the only legacy energy company exploring lithium. Petroleum and renewables company Equinor of Norway bought into Lithium de France in 2021, and Occidental Petroleum is a co-owner of lithium technology group TerraLithium, which owns patents in DLE technologies and direct lithium hydroxide conversion.