Exxon continues move into battery minerals with LG Chem lithium offtake agreement

Oil and gas major ExxonMobil has continued its expansion into the battery minerals sector with the signing of a significant lithium offtake agreement with South Korea’s LG Chem.

ExxonMobil, which has made the extraction of lithium brines from historic oil fields a major focus this year, has signed a non-binding memorandum of understanding for a multi-year offtake agreement for up to 100,000 tonnes of lithium carbonate.

The lithium will be supplied from ExxonMobil’s planned project to LG Chem’s cathode plant in Tennessee, which broke ground in December 2023 and is expected to have an annual production capacity of 60,000t.

Secure supply needed

In announcing the deal, ExxonMobil president of low carbon solutions Dan Ammann said that America is in need of a secure domestic supply of critical minerals like lithium.

“ExxonMobil is proud to lead the way in establishing domestic lithium production, creating jobs, driving economic growth and enhancing energy security here in the United States.”

The US area in south-west Arkansas – where ExxonMobil is operating – contains saltwater brine rich in lithium.

It also has a long history of oil and gas production.

Oil and gas skills

ExxonMobil says it can safely produce this lithium using many of the skills it has honed in delivering oil and gas including geoscience, reservoir engineering and chemical processing.

The company’s planned production of lithium will utilise direct lithium extraction technology and is focused around the Smackover formation in the US.

Australia’s Pantera Minerals (ASX: PFE), US billionaire Warren Buffett’s investment company Berkshire Hathaway and industry majors such as Albemarle, Standard Lithium and Equinor have raced into the Smackover play.

Smackover is a large underground formation that was one of the most prolific oil-producing regions in the US.