American multinational oil and gas firm Exxon Mobil is reportedly under negotiations with Tesla and other major electric automakers for lithium supply from a new source in Arkansas.
As we already know, the industry needs more supply of battery-grade critical minerals to support the surging electric vehicle demand globally. One of these highly in-demand metals is lithium, which is a major component of Li-ion batteries.
Its prices have arguably been rising due to the increased demand, prompting EV and battery makers to guarantee more than enough supply at more stable prices.
As mentioned, Tesla is among the world’s electric automakers most eager to secure lithium supply for its battery partners and for itself. Bloomberg reports citing “people familiar with the matter,” that the Musk-led automaker, Ford, VW, and other players are involved in the negotiations.
“Exxon Mobil Corp. is in talks with Tesla Inc., Ford Motor Co., Volkswagen AG and other automakers about supplying them with lithium as the oil giant works to build a business around the electric-vehicle battery component, according to people familiar with the matter.”
Bloomberg Law
What’s the big deal?
The global EV industry will need almost 60 new lithium mines and plants to support the rapid growth of electric vehicle adoption, researcher Benchmark Mineral Intelligence forecasts. In addition, it warns that the industry will need more lithium in 2030 than the 2015-2022 levels.
Exxon’s newly-developed interest in the lithium mining industry will undoubtedly aid the industry with the looming shortage issue.
The company aims to extract 100,000 tons of lithium annually. To achieve that, it is currently exploring a new 10-acre mining site in Arkansas. However, it remains unclear if the company will self-produce the lithium or if it will partner with other companies.
Exxon claims that the “natural synergy” between its oil and gas production expertise and lithium extraction will aid the company in achieving its annual extraction target. It also announced that its attempt to extract the metal from underground saltwater could potentially aid the company in reducing operating costs and offer a more sustainable approach than the conventional mining process.
“…extracting the lithium is very consistent with a lot of the things that we do in our refineries and chemical plants and, in fact, in some of our upstream operations.”
Exxon CEO Darren Woods said at the earnings conference call
See Also:
- Global supply shortage looms for EV Demand, lithium producers forecast
- Ford, Nemaska Lithium form an 11-year partnership for lithium hydroxide supply
- Lithium costs rebounded as electric vehicle demand
- Tesla finally breaks ground at its new Lithium Refinery in Texas
- Chinese Lithium mining firm Gochin reportedly plans to invest $10B in Afghanistan
Exxon is among the companies deeply affected by the wide adoption of electric vehicles, as its business is centralized in oil and gas. Therefore, it is unsurprising that the company is now looking to expand its business to the current trend. It will leverage its exploitation rights to a new site in Arkansas.
