Oil and gas giant ExxonMobil officially announced the launch of lithium projects
ExxonMobil, a veteran oil and gas company in the United States, has begun its transformation and will start the "white oil" development project.
On the evening of November 13, ExxonMobil, a veteran U.S. oil and gas company, announced its entry into lithium production, and said that it would use an advanced lithium production technology - direct lithium extraction (DLE) technology, which is expected to significantly increase lithium production.
Lithium is the main raw material for electric vehicle batteries. ExxonMobil said it has begun drilling of lithium wells in Arkansas, with the first production expected in 2027.
ExxonMobil has set a goal to produce enough lithium annually for 1 million electric vehicles by 2030.
Direct Lithium Extraction (DLE) technology is also known as salt lake lithium extraction. Producers harvest lithium-rich brine from underground salt lakes and then use DLE technology to separate lithium from the brine and inject the remaining brine back into underground reservoirs.
Goldman Sachs said in a research report released in April that direct lithium extraction technology has the potential to have a significant impact on the lithium industry, just as shale extraction is to oil production.
According to the study, direct lithium extraction technology can significantly improve production efficiency, nearly doubling lithium production. Compared to traditional options such as lithium mining and brine evaporation, the technology can shorten the cycle time to produce lithium from weeks to months to days or even hours. In addition, the technology will significantly increase the recovery rate of lithium, and its application cost will be low to moderate.
According to a Goldman Sachs research report, Chinese companies that use the technology for commercial production include Zangge Mining (000408.SZ), Qinghai Jintai Lithium Co., Ltd., etc. At the same time, EVE Lithium Energy (300014.SZ), an A-share listed company, is building a project of its kind in Qinghai Salt Lake.
Globally, direct lithium extraction technology is still in the commercial demonstration stage. According to the Goldman Sachs research report, the technology still has key challenges in terms of scalability, water consumption and brine reinjection.
ExxonMobil is a Texas-based oil giant that laid out the lithium industry in the 1970s. In 1976, ExxonMobil began manufacturing lithium batteries, but the market was too small and production was discontinued after a few years.
In 2007, ExxonMobil Chemical Corporation and Dongran Chemical, two ExxonMobil companies, jointly developed a new battery separator (V-series) and built a plant in Japan. The following year, ExxonMobil Chemical announced the construction of a new production plant in Gumi, South Korea, to produce battery separators to meet the expected increase in demand.
ExxonMobil's substantial move into lithium production began in May this year.
The Wall Street Journal, citing sources familiar with the matter, said that ExxonMobil spent $100 million to buy 120,000 acres of land in southern Arkansas in May this year. The site has the potential to contain 4 million tonnes of lithium carbonate equivalent, which could provide battery materials for 50 million electric vehicles.
ExxonMobil's past disclosures show that, unlike international oil and gas competitors such as Total and Shell, it is more conservative in its transformation. When looking for business transformation opportunities, ExxonMobilShy away from investing in renewable energyInstead, they chose other emerging tracks, including carbon capture and storage (CCS), biomass fuels, hydrogen production, and more.
ExxonMobil CEO Darren Woods has publicly stated that lithium production is an emerging area where ExxonMobil excels, for example, lithium drilling can apply the company's experience in oil and gas extraction.
according toForecast by the International Energy Agency (IEA), an intergovernmental bodyBy 2030, the number of electric vehicles in the world will be nearly ten times that of today. In the United States, driven by the Inflation Reduction Act and the Bipartisan Infrastructure Act, the market share of electric vehicle sales will grow from 8% in 2022 to 50%.
The World Economic Forum predicts that global demand for lithium will reach 1.5 million tonnes of lithium carbonate equivalent by 2025 and more than 3 million tonnes by 2030. In 2021, global lithium production was only 540,000 tonnes of lithium carbonate equivalent.
At present, global lithium production is concentrated in three regions: Australia, Chile and China. The world's leading lithium producers include Albemarle in the United States, SQM in Chile, Tianqi Lithium (002466.SZ) and Ganfeng Lithium (002460.SZ) in China.
In addition to ExxonMobil, a number of major oil companies around the world have entered the lithium battery industry.
In May 2016, Total SA announced that it had agreed to acquire Saft Groupe, a French battery manufacturing company, in a deal valued at 950 million euros.
In October 2022, Dutch Shell entered into two battery storage cooperation agreements, namely a 50% stake in Kondonin, an energy storage project in Western Australia, in partnership with Foresight Group, a British solar investment company, and a cooperation agreement with AMPYR Australia Pty Ltd, a renewable energy company, to build a 500 MW/1,000 MWh battery energy storage system.
