Exxon aims to begin lithium production by 2026 in Arkansas -source

International Battery Metals

11/11/2023 20:04

(Adds that Exxon declines to comment, paragraph 7)
    By Ernest Scheyder
       Nov 11 (Reuters) - Exxon Mobil  XOM.N  is set to unveil
its long-awaited lithium strategy on Monday with an announcement
that it aims to start production of the electric vehicle (EV)
battery metal in Arkansas by 2026, according to a source with
direct knowledge of the oil major's plans.
    Exxon's expansion into the sector comes as emerging
technologies aim to boost global production of the ultralight
metal by filtering it from salty brine deposits found across the
globe and supplying it to battery makers eager for fresh
sources.
    Exxon, which invented the lithium-ion battery in the 1970s
but stepped away from the technology, plans to begin producing
at least 10,000 metric tons per year of lithium in Arkansas by
2026 with partner Tetra Technologies  TTI.N  in what has been
labeled "Project Evergreen," according to the source.
    That initial production would be roughly equivalent to the
amount needed to produce 100,000 EV batteries.
    Reuters reported this year that Exxon had agreed to develop
more than 6,100 lithium-rich acres in Arkansas with Tetra, which
produces chemicals for water treatment and recycling. 
    Exxon has been drilling wells in Arkansas this year to study
the vast Smackover Formation, a geological formation stretching
from Florida to Texas that teems with lithium- and bromine-rich
brine. The company has also been testing unproven direct lithium
extraction (DLE) technology that will be crucial for commercial
operations, according to the source, who was not authorized to
speak publicly.
    An Exxon spokesperson declined to comment. A representative
for Tetra was not immediately available to comment. 
    For Exxon and other oil companies, lithium production offers
the prospect of selling a new product with relatively little
added cost. Darren Woods, Exxon CEO since 2017, told investors
during a call on Oct. 4 that the lithium sector was "fairly
promising." 
    He also said: "We see an opportunity to really leverage the
things that we're pretty good at."
    Exxon, like other fossil fuel producers, has faced pressure
to reduce carbon emissions from operations. Reuters reported
this year that Exxon shareholder Engine No. 1 had pressured the
company to deploy DLE.
    Exxon is not expected to publicly announce which DLE
technology it has chosen, according to the source. The company
has a long-standing pattern of not disclosing some vendors.
    Reuters reported this year that Exxon and Chevron  CVX.N 
held talks with International Battery Metals  IBAT.CD  and
EnergySource Minerals about licensing DLE technology.    
    
    OTHER ACREAGE
    Separate from its Tetra partnership, Exxon also controls
more than 100,000 acres in Arkansas from which it plans to begin
lithium production by 2027, according to the source. 
    Exxon acquired that acreage this year from privately held
Galvanic Energy, Reuters reported. 
    It was not clear whether Exxon plans to expand lithium
operations outside Arkansas. Like all oil producers, Exxon
extracts water containing traces of lithium as part of fossil
fuel production. That could help the oil industry morph into the
world's largest lithium supplier, if DLE technologies can be
commercialized.
    Exxon, like Albemarle  ALB.N , Standard Lithium  SLI.V  and
others aiming to produce the battery metal in Arkansas, face a
key regulatory roadblock. The southern U.S. state, just north of
Louisiana, has a royalty structure for bromine, which Albemarle
has long produced there, but not for lithium, which could delay
development in the short term.
    The Arkansas Oil and Gas Commission, which overseas lithium
operations in the state, has said it plans to hold hearings on
the matter.   
    Exxon plans to send at least six representatives to the
Benchmark Minerals conference next week in Los Angeles,
according to an attendance list seen by Reuters. It would mark
the company's first attendance at the major critical minerals
conference.

 (Reporting by Ernest Scheyder; editing by Caroline Humer and
David Gregorio)
 ((ernest.scheyder@thomsonreuters.com; Twitter: @ErnestScheyder;
+1-713-210-8512; Reuters Messaging:
ernest.scheyder.thomsonreuters.com@reuters.net))