Exxon Mobil Corp. said Monday it plans to begin producing lithium for electric-vehicle batteries by 2027 from a mining operation in southwest Arkansas under the brand Mobil Lithium.
The oil and gas giant
said it’s planning to be a “a leading producer of lithium” but did not provide any projected sales figures for the business.
Exxon Mobil plans to produce enough lithium to supply the manufacturing needs of more than 1 million EVs per year by 2030.
Dan Ammann, president of low-carbon solutions at ExxonMobil, said the company will use its expertise “to unlock vast supplies of North American lithium with far fewer environmental impacts than traditional mining operations.”
TD Cowen analyst Jason Gabelman said the production target implies a roughly $2 billion capital investment by Exxon and production of about $800 million in earnings before interest, taxes, depreciation and amortization.
Exxon in June announced a partnership with Tetra Technologies Inc.
to jointly develop lithium acreage, Gabelman noted.
Exxon also said recently that the lithium-production business appears promising and that it would be part of the company’s corporate plan update on Dec. 6.
Exxon Chief Executive Darren Woods said on the company’s third-quarter analyst call on Oct. 27 that lithium would be part of its portfolio in the future.
“It comes back to this fundamental capability of managing and transforming hydrogen and carbon molecules to products that the world needs and leveraging our capabilities,” Woods said, according to a transcript of the call. “And lithium fits into that along with our other businesses in biofuels, hydrogen, carbon capture and storage.”
Exxon Mobil said it paid an undisclosed sum for rights to 120,000 gross acres of the Smackover formation in Arkansas, which it said is “considered one of the most prolific lithium resources of its type in North America.”
Arkansas Gov. Sarah Huckabee Sanders said her administration “supports an all-of-the-above energy strategy that guarantees good, high-paying jobs for Arkansans,” according to a statement.
Exxon Mobil’s stock was up 1.2% in regular trading. The stock is down by 5.9% in 2023, compared with a 3.8% rise by the Dow Jones Industrial Average