ExxonMobil taps Arkansas for lithium play
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ExxonMobil on Monday confirmed it will drill for lithium in south Arkansas, making use of rights in Lafayette and Columbia counties it bought in May for a reported $100 million.
Why it matters: Most lithium comes from abroad. Development of an extraction industry from the Smackover Formation could be an economic boon for south Arkansas and help the U.S. become more energy independent.
- One estimate suggests there's enough lithium in the formation to power 50 million electric vehicles.
The big picture: It comes at a time when EVs are becoming a major focus for automakers, even in the face of operational and political headwinds, Axios' Ben Geman writes.
- Demand for lithium batteries in the U.S. alone is expected to grow sixfold by 2030.
Details: ExxonMobil's plan calls for separating lithium from groundwater and processing to battery-grade material on-site. The salty water will then be returned to the formation — a more environmentally friendly way to cultivate the mineral than strip or evaporative mining.
- Production is planned for 2027, and by 2030 the company said it will provide enough lithium for one million EVs annually.
- For a sense of scale, this year U.S. EV sales topped 1 million annually for the first time.
- The announcement calls ongoing work in Arkansas the "first phase" of North American production.
- The product will be branded "Mobil Lithium," which Exxon calls a shoutout to Mobil's history with the auto sector.
Exxon didn't provide the estimated investment size.
State of play: At least four projects in various stages are underway in southwest Arkansas headed by Canadian company Standard Lithium (SLI), which also does exploration drilling in east Texas.
- A preliminary feasibility study this summer said it would cost SLI $1.27 billion to build a new plant near Magnolia (the town nearest to Exxon's site).
- Yes, but: SLI's high estimate for that plant was 35,000 tons of lithium annually. The Wall Street Journal reported the planned Exxon plant will produce 75,000-100,000 tons per year.
What they're saying: Patrick Howarth, ExxonMobil's lithium global business manager, wouldn't speculate on the plant's eventual capacity. The company is focusing on drilling for its supply, he told Axios.
- Building those wells and an infrastructure will help determine its size, the number of jobs to be created and production capacity.
- Arkansas didn't provide the company any tax incentives, he said.
- The promise of a rich lithium concentration in the Smackover and a workforce with a background in drilling attracted ExxonMobil to the area, Howarth said.
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