Exxon Mobil, a major oil company, has announced plans to become a significant player in the production of lithium for electric vehicle batteries. The company has purchased 120,000 acres of a geological site in southern Arkansas called the Smackover Formation that is rich in lithium, and it will begin to produce battery-grade lithium at the site as soon as 2027. Exxon aims to supply enough of the mineral to support the manufacture of one million electric vehicles annually 2030.
The company is currently in discussions with potential customers such as electric vehicle and battery manufacturers. This move comes as major oil companies are under increasing pressure to address climate change, with Exxon aiming to invest $17 billion through 2027 to reduce emissions with a focus on carbon capture, hydrogen, and biofuels.
Exxon will be deploying drilling techniques used in oil and gas extraction to access saltwater reservoirs rich in lithium that are 10,000 feet below ground. The lithium will be separated from the saltwater and turned into battery-grade material onsite, according to the company.
This development is significant as demand for lithium batteries is expected to surge sixfold in the U.S. 2030. Despite having some of the largest deposits of the mineral in the world, the U.S. is heavily reliant on imports from Argentina and Chile for its lithium needs. The country currently has just one commercial-scale lithium production operation, located in Nevada.
Exxon’s foray into lithium production is a pivot for the company, which invented the lithium battery in the 1970s but did not pursue the technology at the time. The move is seen as essential to the energy transition, with ExxonMobil aiming to play a leading role in paving the way for electrification.