Exxon Ropes in LG Chem as Buyer for Planned US Lithium Project

LG Chem Ltd. has signed a deal with Exxon Mobil Corp. to potentially purchase up to 100,000 metric tons of lithium carbonate from a planned domestic project of the United States oil and gas giant.

Supply under the non-binding memorandum of understanding for a multi-year offtake agreement is meant for the South Korean chemical manufacturer’s under-construction cathode plant in Tennessee, said a joint statement Tuesday. The companies did not specify the planned duration of the potential contract.

ExxonMobil earlier signed a non-binding MOU with SK On Co. Ltd., also a South Korean vehicle battery player, for a multi-year offtake agreement of up to 100,000 metric tons, as announced by ExxonMobil June 25. Like LG Chem, SK On plans to use the supply for its manufacturing operation in the U.S., where it expects to reach over 180 gigawatt hours of annual capacity after 2025.

Last year ExxonMobil launched drilling for a lithium production project in southwest Arkansas, targeting startup in 2027. The site is the Smackover formation, “one of the most prolific lithium resources of its type in North America”, according to ExxonMobil, which holds rights to 120,000 gross acres.

ExxonMobil aims to supply lithium for about one million electric vehicle (EV) batteries annually by 2030, it said in a press release November 13, 2023, announcing the start of drilling.

Tuesday’s announcement said, “Final investment decision will be subject to various factors including the establishment of commercially competitive regulatory frameworks”.

“The planned production of Mobil™ Lithium will utilize Direct Lithium Extraction [DLE] technology, aligning seamlessly with ExxonMobil’s core competencies in subsurface exploration, drilling, and chemical processing”, the online statement said. “This approach offers U.S. EV battery manufacturers a domestically extracted and processed lithium supply option which is expected to have substantially lower environmental impacts, including approximately two-thirds less carbon intensity than hard rock mining”.

Meanwhile LG Chem broke ground December 20, 2023, on a 1.7-million-square-meter (18.3 million square feet) site in Clarksville for what it expects to be the U.S.’ biggest cathode plant. The first phase of the project aims to produce up to 60,000 metric tons per year. LG Chem eyes the start of production 2026.

“America needs secure domestic supply of critical minerals like lithium”, said Dan Ammann, president for low-carbon solutions at ExxonMobil. “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”.

This year the DOE announced over $3 billion in provisional awards for 25 projects that boost domestic production of battery materials and advanced batteries, following up on a $1.82 billion award to 14 projects under the same funding opportunity.

“The selected projects span strategic segments across the supply chain, building and expanding commercial-scale facilities to extract and recycle critical minerals including lithium, graphite, and manganese, as well as manufacture components”, it said in a statement September 20, 2024. “These components represent the most essential building blocks of the battery supply chain, like electrolyte salts, solid state electrolytes, polymers for separators, cathode and anode materials, that are critical to onshore a robust and reliable energy supply chain.

“The selected projects also cover traditional and next-generation lithium-ion chemistries, as well as non-lithium-ion technologies, to ensure that the U.S. has a diverse portfolio of domestic battery technologies that can strengthen our overall energy security”.

One of the selectees in the latest group is a project by Standard Lithium Ltd. and Equinor ASA that is located on the same site as the Mobil Lithium project and is also designed to use DLE technology. The initial phase is planned to produce 22,500 metric tons annually.

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