Exxon Mobil (NYSE:XOM) has announced plans to commence lithium production from subsurface wells in the United States by 2027, aiming to supply the key metal used in electric car batteries and advanced electronics. The move reflects oil majors’ increasing investments in the electrification sector, aligning with government initiatives in the U.S. and Europe to promote electric vehicle (EV) adoption and reduce reliance on fossil fuels.
Exxon intends to extract lithium from briny waters in Arkansas, an area known for significant lithium deposits. The company emphasizes the urgency to establish domestic sources for critical materials like lithium. Exxon plans to contribute lithium supplies for over 1 million EVs annually, aspiring to become a leading supplier of the metal by 2030. Analysts estimate that achieving this goal could necessitate approximately $2 billion in capital expenditures to provide 50,000 tonnes of lithium, potentially generating $800 million in cash.
The extraction process involves using conventional oil and gas drilling methods to access lithium-rich saltwater from reservoirs about 10,000 feet underground. Exxon will employ direct lithium extraction (DLE) technology to separate lithium from the saltwater. The company’s Canadian affiliate, Imperial Oil, has also invested in a lithium-extraction pilot project in Alberta, Canada.
Exxon’s partnership with Tetra Technologies, as reported exclusively by Reuters, will involve on-site production, with the metal sold under the brand name Mobil Lithium. While Exxon has not disclosed the exact investment amount or the projected profitability timeline for the lithium business, the company aims to establish a significant presence in the global lithium market.
Unlike European oil rivals BP and Shell, which have invested in EV charging stations, Exxon has no plans to enter the charging infrastructure sector. Instead, it focuses on supplying lithium for EV batteries, consumer electronics, and energy storage systems.
Exxon, credited with inventing the rechargeable lithium-ion battery in the 1970s, emphasizes the substantial opportunity for growth in the EV sector. With around 280 million vehicles in the United States, of which fewer than 3 million are EVs, there is immense potential for expansion, presenting a lucrative opportunity for companies involved in the lithium supply chain.
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Author Faith Yakubu 
