ExxonMobil Corp. has the deep pockets and geology expertise to become a major player in lithium extraction, the lithium global business manager for ExxonMobil Low Carbon Solutions told S&P Global Commodity Insights at the Benchmark Week 2023 conference.
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The oil and gas behemoth, whose market cap of roughly $400 billion exceeds the combined valuation of the four largest publicly traded mining companies, plans to add lithium to its portfolio and house production under the Mobil Lithium brand. ExxonMobil announced on Nov. 13 that it started a drilling campaign for the battery metal in part of the 120,000 gross acres it holds in the Smackover formation of southern Arkansas.
"For deep brines within the subsurface, we've got existing oil and gas capabilities," Patrick Howarth said in an interview at the conference, held Nov. 14-16 in Los Angeles. "The ability to drill wells, [bring] fluids to surface, reservoir monitoring and maintenance."
"We've then got a chemicals processing capability ... and then to underpin all of that, capital project execution capabilities," Howarth added.
ExxonMobil's massive balance sheet gives it the ability to experiment in lithium projects while still pulling in cash from its oil and gas sales. The company plans to invest "hundreds of millions of dollars" into each of its lithium projects, Howarth said.
Industry players agreed that ExxonMobil is well-positioned to produce lithium from brine.
"To successfully build out the necessary lithium infrastructure here in North America, multiple players with sizable checkbooks are going to be required. Obviously, ExxonMobil fits the bill there, in addition to having significant internal technical talent," Chris Berry, founder and president of House Mountain Partners, a battery metals investment consultancy, told Commodity Insights in an email.
ExxonMobil is taking a risk on nascent direct lithium extraction (DLE) technology, which could lower costs and reduce the environmental impact of separating the lithium found in brine deep underground.
"We know that DLE hasn't been deployed at scale. We think that ExxonMobil has the skills, capabilities and resources to be able to take on this challenge," Howarth said. ExxonMobil aims to begin commercial lithium production at the Arkansas formation by 2027 and expand its total lithium production by 2030 to supply the manufacturing needs of over one million EVs per year.
The area's well-known geology, straightforward permitting and existing infrastructure make it a prime area for ExxonMobil's venture into the lithium industry, Paul Lloyd, managing director of Arizona Lithium Ltd., told Commodity Insights. Lloyd's company will use similar extraction methods at its Prairie Lithium project in the Duperow Formation in Saskatchewan, Canada.
"If you look at lithium brine production, it's exactly what they do for oil and gas," Lloyd said.
Unlike many miners who are getting to know carmakers for the first time, ExxonMobil has a long history of working with the automotive industry. By producing lithium in the US, it can provide raw materials to EV makers hoping to qualify for a tax credit under the Inflation Reduction Act.
ExxonMobil is in discussions with automakers including Tesla Inc. and Ford Motor Co. to supply lithium for electric vehicle batteries, according to media reports published July 31.
"When we get to potential customers, what we've got is a really long history of working with those automotive players who are innovating in the technology space," Howarth said.
Platts assessed seaborne lithium carbonate and lithium hydroxide at the identical rate of $20,000/mt CIF North Asia Nov. 17, down 73% and 75%, respectively, since the start of the year.
Platts is part of S&P Global Commodity Insights.