Replies to This Discussion

Permalink Reply by Rock Man on June 26, 2023 at 13:54

Watch Halliburton jump into Lithium effort soon - they tend to go lock step with SLB.

Permalink Reply by Rock Man on June 27, 2023 at 3:15

It is interesting to me exactly where SLB may be working near the old Bryans Mill Smackover field.

Although USGS water report referenced over 400 mg per liter lithium concentrations in the Smackover in this field, the subsequent saltwater injection over time that was done in this field to maintain bottom hole formation pressure for the purpose of optimizing oil / condensate recovery should have severely diluted the original Smackover water in the field proper area.

Attached paper references this water injection - 63 million barrels of salt water (no idea as to source of water or lithium concentrations in that fluid).

Personally, any effort tied to lithium extraction has to be tied to a Smackover section that is not part of the original Bryans Mill Smackover reservoir / trap.

Attachments:

• spe-1278-ms Bryans Mill SMK.pdf, 415 KB

Permalink Reply by Skip Peel - Mineral Consultant on June 29, 2023 at 2:45

Exclusive: Exxon Mobil expands lithium bet with Tetra Technologies deal

By Ernest Scheyder June 28, 2023 www.reuters.com

June 28 (Reuters) - Exxon Mobil (XOM.N) has agreed to develop more than 6,100 lithium-rich acres in Arkansas with Tetra Technologies Inc (TTI.N), the second move this year by the oil giant for control of assets needed to produce the electric vehicle battery metal.

Exxon's rapid expansion into the lithium sector comes amid growing interest by traditional energy companies and others into emerging technologies that aim to boost global supply of the ultralight metal.

Tetra, which produces chemicals for water treatment and recycling, earlier this week said it had signed an agreement with a company known as Saltwerx to develop 6,138 acres of salty brine deposits in Arkansas that are filled with lithium and bromine, although it provided few additional details.

Saltwerx is a subsidiary of Exxon, according to two people familiar with the matter. Exxon acquired it earlier this year when it bought a neighboring Arkansas parcel of 100,000 acres from Galvanic Energy. Galvanic remains an independent, privately held company and is not affiliated with Tetra or Exxon.

Representatives for Tetra were not immediately available to comment. Exxon declined to comment.

Financial terms were not disclosed. Neither company provided a production or development timeline, although Exxon will be contributing about 2,000 acres and Tetra about 4,100 acres to the partnership. Certain details still need to be finalized.

By partnering with Exxon, Tetra gains a large partner with capital to help it produce bromine, which is used in flame retardants, from the acreage. Tetra currently buys bromine from Lanxess (LXSG.DE) to produce a material used by Eos Energy Enterprises (EOSE.O) to manufacture batteries.

Exxon, meanwhile, gains access to yet another U.S. supply of lithium as the country rapidly expands its EV supply chain. Both companies plan to file an amended application to develop the brine deposits later this year with Arkansas officials.

Exxon would need to chose at least one direct lithium extraction (DLE) technology to filter the metal from the Arkansas brine, although such technologies are largely unproven at commercial scale. Reuters reported earlier this month that Exxon has held talks with International Battery Metals (IBAT.CD) and EnergySource Minerals about licensing DLE technology.

Tetra said in November it has been investigating various DLE technologies, but had not signed any agreements.

Tetra had previously agreed to lease more than 27,000 acres in Arkansas to Standard Lithium (SLI.V) to produce lithium. Standard has started preliminary work on development of that project.

Reporting by Ernest Scheyder Editing by Chris Reese

Permalink Reply by Skip Peel - Mineral Consultant on July 2, 2023 at 4:28

Strong Lithium Demand Ahead — Will Supply Keep Pace?

Priscila Barrera  Jun. 29, 2023 02:00PM PST

As lithium demand continues to rise on the back of electric vehicle sales and increased uptake of energy storage systems, many are wondering if supply will be able to keep up.

Lithium miners are facing pressure to keep up with growing demand from the electric vehicle and energy storage sectors.

Bringing new lithium supply online is not an easy task, and time and time again projects have faced challenges and delays.

“The positive surprises in the last five years have all been on the demand side,” Joe Lowry of Global Lithium said during a panel discussion at the recent Lithium Supply and Battery Raw Materials conference, hosted in Las Vegas, US, by Fastmarkets. “The negative surprises have all been on the supply side: slow projects, no permitting.”

Chris Berry of House Mountain Partners is also expecting supply to be tight until many of the current roadblocks, including permitting, are resolved in regions such as North America.

“Until there’s a reckoning with respect to stakeholders about how much more pragmatic we are all going to have to be in terms of accelerating supply, I think you are looking at really structural deficits, arguably not just for lithium, but for other battery raw materials as well,” he said.

Also sharing his thoughts during the talk was Daniel Jimenez of iLi Markets. While he agreed that permitting is a big issue for bringing new supply online, for him a bigger problem today is know-how.

“Technical knowledge is very regionalized: brines in South America, hard rock in Australia and lithium refining in China,” he said. “This lack of knowledge is very acute in this industry today; that’s why in the next four, five years I think we will be running into a significant deficit.”

One of the ways know-how could be shared and supply could be accelerated is through M&A.

“M&A will help speed up bringing supply online as it speeds up the knowledge share. But you also need a lot of investment,” William Adams of Fastmarkets said. “You can’t just have M&A — you also need a lot of investments in juniors to bring new supply online, and maybe M&A activity diverts some of that investment away from juniors.”

Lessons learned from lithium's price run

Lithium prices hit historical highs last year following a rally that began at the end of 2020. When asked what lessons have been learned from that season, Lowry said probably very few and that only time will tell.

“I think we have seen abject panic, which is what ran the price up … market forces took it to the US$80,000 (per metric ton) range roughly, and it probably shouldn’t have happened,” he said.

Lithium spot prices continued to climb throughout 2022, but in November they turned to the downside, falling by about 50 to 70 percent. Prices finally began to stabilize and move upward again in May.

For Tara Berrie of electric vehicle maker Rivian (NASDAQ:RIVN), lithium company share prices are hypersensitive to spot prices, which in the end are just noise and distraction.

“From an investor perspective, we need to learn to be able to cut out the noise and look at (the fact that) there will be a fundamental shortfall," said Berrie, who previously worked at Tesla (NASDAQ:TSLA), Allkem (ASX:AKE,OTC Pink:OROCF) and Rio Tinto (ASX:RIO,NYSE:RIO,LSE:RIO). "Investment has to continue, otherwise any delays will extend project timelines that are massively long already.”

Aside from spot price movements, investors tend to be hesitant to jump into lithium because of the industry's track record when it comes to the rollout of mining projects.

“It always seems to take longer — it always seems to cost more,” Berry said. “You can get (a refinery) permitted and built in three to four years, not 10 to 15 that it will take for a mine, and ideally you are selling a very high end value product even though none of it is relevant without much more raw material supply.”

Lithium supply in the short term

Looking at the short-term supply and demand dynamics in the lithium space, it is important to remember that demand is not just a function of what is being consumed, but also the allowance to build out working stock.

“To satisfy the demand for lithium from a producer perspective you need to not only supply the client, but also to have all the inventory in the pipeline — that alone is at least three months of production,” said Jimenez, who previously worked at SQM (NYSE:SQM).

“So if we say the lithium industry will be close to a million tonnes this year, we know we have an inventory today of about 250,000 tonnes in the pipeline. So inventories play a key role in this high-growth rate of consumption,” he added.

Ashish Patki of Livent (NYSE:LTHM) pointed out that it is also important to consider who is holding inventories of lithium when looking at short-term supply.

“Is it lithium producers who have finished goods inventory, or is it some traders who are now getting active in this growing industry and are keeping some stocks to benefit from the price movements that happen?” he said. “Those nuances matter when it comes to overall industry demand and supply. Time of the year also matters — both demand and supply are seasonal.”

Don’t forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.

Permalink Reply by Skip Peel - Mineral Consultant on July 2, 2023 at 5:26

Although the article doesn't explicitly state it, I think the concerns about permitting are tied to open pit mining.  That will concern a lot of stake holders and require stringent review.  Lithium extracted from subsurface brines may not experience that problem.

Permalink Reply by Skip Peel - Mineral Consultant on July 2, 2023 at 6:24

Lithium Scarcity Pushes Carmakers Into the Mining Business

Ford, General Motors and others are striking deals with mining companies to avoid raw material shortages that could thwart their electric vehicle ambitions.

• July 2, 2023 nytimes.com

Eager to avoid falling further behind Tesla and Chinese car companies, many Western auto executives are bypassing traditional suppliers and committing billions of dollars on deals with lithium mining companies.

They are showing up in hard hats and steel-toed boots to scope out mines in places like Chile, Argentina, Quebec and Nevada to secure supplies of a metal that could make or break their companies as they move from gasoline to battery power.

Without lithium, U.S. and European carmakers won’t be able to build batteries for the electric pickup trucks, sport utility vehicles and sedans they need to remain competitive. And assembly lines they are ramping up in places like Michigan, Tennessee and Saxony, Germany, will grind to a halt.

Established mining companies don’t have enough lithium to supply the industry as electric vehicle sales soar. General Motors plans for all its car sales to be electric by 2035. In the first quarter of 2023, sales of battery-powered cars, pickups and sport utility vehicles in the United States rose 45 percent from a year earlier, according to Kelley Blue Book.

So car companies are scrambling to lock up exclusive access to smaller mines before others swoop in. But the strategy exposes them to the risky, boom-and-bust business of mining, sometimes in politically unstable countries with weak environmental protections. If they bet incorrectly, automakers could end up paying far more for lithium than it might sell for in a few years.

Auto executives said they had no choice because there weren’t sufficient reliable supplies of lithium and other battery materials, like nickel and cobalt, for the millions of electric vehicles the world needs.

In the past, automakers let battery suppliers buy lithium and other raw material on their own. But lithium shortages have forced carmakers, which have deeper pockets, to directly acquire the essential metal and have it sent to battery factories, some owned by suppliers and others owned partly or fully by the automakers. Batteries rely on lightweight lithium ions to conduct energy.

“We quickly realized there wasn’t an established value chain that would support our ambitions for the next 10 years,” said Sham Kunjur, who oversees General Motors’ program to secure battery materials.

The automaker last year struck a supply deal with Livent, a lithium company in Philadelphia, for material from South American mines. And in January, G.M. agreed to invest $650 million in Lithium Americas, a company based in Vancouver, British Columbia, to develop the Thacker Pass mine in Nevada. The company beat out 50 bidders, including battery and component makers, for that stake, said Mr. Kunjur and Lithium Americas executives.

Ford Motor has made lithium deals with SQM, a Chilean supplier; Albemarle, based in Charlotte, N.C.; and Nemaska Lithium of Quebec.

“These are some of the largest lithium producers in the world with the best quality,” Lisa Drake, vice president for electric vehicle industrialization at Ford, told investors in May.

The deals that automakers are striking with mining companies and raw material processors hark back to the beginnings of the industry, when Ford set up rubber plantations in Brazil to secure material for tires.

“It almost seems like 100 years later, with this new revolution, we are back to that stage,” Mr. Kunjur said.

Establishing a supply chain for lithium will be expensive: $51 billion, according to Benchmark Mineral Intelligence, a consulting firm. To benefit from U.S. subsidies, battery raw materials must be mined and processed in North America or by trade allies.

But intense competition for the metal has helped inflate lithium prices to unsustainable levels, some executives said.

“Since the start of ’22 the price of lithium has gone up so quickly and there was so much hype in the system, there were a lot of really bad deals that one could do,” said R.J. Scaringe, chief executive of Rivian, an electric vehicle company in Irvine, Calif.

Dozens of companies are developing mines, and there may eventually be more than enough lithium to meet everybody’s needs. Global production could surge sooner than expected, leading to a collapse in the price of lithium, something that has happened in the recent past. That would leave automakers paying a lot more for the metal than it was worth.

Auto executives are taking no chances, fearing that if they go even a few years without sufficient lithium their companies will never catch up.

Their fears have merit. In places where electric vehicle sales have grown the fastest, established automakers have lost a lot of ground. In China, where almost one-third of new cars are electric, Volkswagen, G.M. and Ford have lost market share to domestic producers like BYD, which manufacturers its own batteries. And Tesla, which has built a supply chain for lithium and other raw materials over years, has steadily gained market share in China, Europe and the United States. It is now the second-largest seller of all new cars in California after Toyota.

Chinese companies often have an edge over U.S. and European car companies because they are state owned or state supported, and, as a result, can take more risks in mining, which often encounters local opposition, nationalization by populist governments or technical difficulties.

In June, the Chinese battery maker CATL completed an agreement with Bolivia to invest $1.4 billion in two lithium projects. Few Western companies have shown sustained interest in the country, known for its political instability.

With a few exceptions, Western carmakers have avoided buying stakes in lithium mines. Instead, they are negotiating agreements in which they promise to buy a certain amount of lithium within a price range.

Often the deals give carmakers preferential access, crowding out rivals. Tesla has a deal with Piedmont Lithium, which is near Charlotte, that ensures the carmaker a large portion of the output from a mine in Quebec.

Lithium is abundant but not always easy to extract.

Many countries with big reserves, like Bolivia, Chile and Argentina, have nationalized natural resources or have stringent currency exchange controls that can limit the ability of foreign investors to withdraw money from the country. Even in Canada and the United States, it can take years to establish mines.

“Lithium is going to be tough to get and to fully electrify here in the U.S.,” said Eric Norris, president of the Lithium global business unit at Albemarle, the leading American lithium miner.

As a result, auto executives and consultants are fanning out to mines around the world, most of which have not begun producing.

“There’s a bit of desperation,,” said Amanda Hall, chief executive of Summit Nanotech, a Canadian start-up working on technology to hasten extraction of lithium from saline groundwater. Auto executives, she said, are “trying to get ahead of the problem.”

Yet, in their hurry, car companies are making deals with small mines that may not live up to expectations. “There are a lot of examples of problems that come up,” said Shay Natarajan, a partner at Mobility Impact Partners, a private equity fund focused on investing in sustainable transportation. Lithium prices could eventually collapse from overproduction, she said.

The miners appear to be the big winners. Their deals with the car companies typically assure them fat profits and make it easier for them to borrow money or sell shares.

Rio Tinto, one of the world’s largest mining companies, recently reached a preliminary agreement to supply lithium to Ford from a mine it was developing in Argentina.

Ford was one of several car companies that expressed interest, said Marnie Finlayson, managing director of Rio Tinto’s battery minerals business. Rio Tinto takes car company representatives through a checklist, she said, that covers mining methods, relations with local communities and environmental impact “to get everyone comfortable.”

“Because if we can’t do that, then the supply is not going to be unlocked, and we’re not going to solve this global challenge together,” Ms. Finlayson said, referring to climate change.

Until a few years ago, the price of lithium was so low mining it was hardly profitable. But now with the growing popularity of electric vehicles, there are dozens of proposed mines. Most are in early development stages and will take years to begin production.

Until 2021, “there was either no capital or very short-term capital,” said Ana Cabral-Gardner, co-chief executive of Sigma Lithium, a Vancouver-based company that is producing lithium in Brazil. “No one was looking at a five-year horizon and a 10-year horizon.”

Auto companies are playing an important role in helping mines get up and running, said Dirk Harbecke, chief executive of Rock Tech Lithium, which is developing a mine in Ontario and a processing plant in eastern Germany that will supply Mercedes-Benz.

“I do not think that this is a risky strategy,” Mr. Harbecke said. “I think it’s a necessary strategy.”

Permalink Reply by Skip Peel - Mineral Consultant on July 5, 2023 at 5:09

ExxonMobil Charges Forward Into Lithium Extraction With Latest Deal

A new report said the US supermajor has made its second move in a month to enter the emerging lithium extraction industry. 

June 29, 2023 By Trent Jacobs  jpt.spe.org

ExxonMobil is pushing forward in its quest to become a player in the emerging US battery supply chain after inking a new partnership with Tetra Technologies. This is according to Reuters, which reported that the US supermajor is partnering with Tetra to extract lithium from brine across a position encompassing more than 6,100 acres in southern Arkansas.

Earlier this week, Tetra, a completions fluids specialist based in the Houston area, announced it signed a memorandum of understanding with Saltwerx to pool the company’s respective mineral rights across approximately 6,000 acres in Arkansas. Tetra said that a firm agreement with the Arkansas-based brine producer Saltwerx hinges on gaining regulatory approval to start producing the area’s brine that is laden with bromine and lithium.

The development follows ExxonMobil’s reported $100 million acquisition of Galvanic Energy last month along with its 120,000 acres of leases in the Smackover play. The position is estimated to hold as much as 4 million tons of the lithium, which is needed to make electric vehicle batteries.

In addition to its rich lithium reserves, the Jurassic-era Smackover formation is recognized as the world's second-largest bromine supplier, a mineral that likewise can be used to make rechargeable batteries but of a different variety.

In 2021, Tetra reported that it had started commercial production of a clear zinc-bromide fluid, sourced from Arkansas brine, which it supplies to makers of nonlithium batteries and other energy storage applications.

Permalink Reply by Joe B. Lovelace on July 20, 2023 at 7:07

From today's Wall Street Journal.  

This Arkansas Town Could Become the Epicenter of a U.S. Lithium Boom

Attachments:

• This Arkansas Town Could Become the Epicenter of a U.S. Lithium Boom - WSJ.pdf, 862 KB

Permalink Reply by Skip Peel - Mineral Consultant on July 20, 2023 at 7:25

Thanks, Joe.  I'm getting more contacts from land and mineral owners who are receiving offers to lease for Smackover brine.  More speculators are looking to invest in brine leases and hiring land companies to make offers. Here is my advice at this time.  Unless someone has an urgent financial need that could be addressed by the lease bonus, do not lease at this time.  And secondly, please understand that this lithium land rush is just beginning and it will take some months, maybe a couple of years, to have enough information available for land and mineral owners to make an informed decision.  The language in those brine leases does not favor the mineral owner.  If anyone is considering signing one, please see an experienced O&G attorney.

Permalink Reply by Skip Peel - Mineral Consultant on July 31, 2023 at 14:39

Tetra Technologies seeks brine unit with goal of building $500 million bromine facility on Columbia-Lafayette line

Mike McNeill, publisher and editor  Jul 31, 2023 magnoliareporter.com

http://www.magnoliareporter.com/news_and_business/lafayette_county/...

Tetra Technologies plans to build a half-billion-dollar bromine production facility along the Columbia-Lafayette county line, pending action by the Arkansas Oil and Gas Commission.

The commission, meeting last Tuesday in El Dorado, heard Tetra’s request that the commission create what the company calls the “Evergreen Brine Unit.”

Tetra, which is based in The Woodlands, TX, made a presentation to commissioners that stressed its need for bromine.

CLICK HERE to download the Power Point presentation.

At present, Tetra’s primary products are bromine completion fluids that are important to the oil and gas industry.

A bromine-based electrolyte for long duration energy storage has recently been brought to the market by Tetra. Bromine is also in demand for fire retardants for electric vehicles.

Tetra is unable to acquire sufficient bromine on the open market to meet its needs, the company presentation said.

The same saltwater brine Tetra proposes to produce from its prospective production field in the two counties may also be used to produce lithium. Lithium is the high demand chemical element that is needed to store the energy for electric vehicles.

Tetra wants to ship elemental bromine made locally to its West Memphis facility. That’s where Tetra makes the brominated compounds it sells to its customers.

An unnamed joint venture partner and Tetra “intend to construct both a bromine and lithium brine extraction facility in the southeast portion of its mineral lease. Estimated $500 million investment for both plants, wells and pipelines,” a slide in Tetra’s PowerPoint presentation to the commission read.

The plant’s location isn’t specified, but it appears to be along Columbia County Road 50, which turns into Lafayette County Road 21 once the county line is crossed. However, the area also appears to be in the small portion of land in Columbia County that is part of the Lafayette County School District.

Lithium production isn’t in Tetra’s immediate plans, but the company said it would seek AOGC approval before doing so.

About 6,138 acres are included in legal descriptions of the land for the proposed Evergreen Brine Unit. Approximately two-thirds of the land is in Columbia County, along and north of County Roads 1 and 50 three miles southwest of the Lake Columbia spillway. About one-third is in Lafayette County, along and north of Lafayette County Road 36, terminating near the former McKamie Gas Plant.

Tetra Technologies plans to drill five brine supply wells in Columbia County. It also plans five injection wells to send the brine back into the Smackover Formation once bromine is extracted. Three of the injection wells will be in Columbia County, and two in Lafayette County.

Tetra Technologies discusses its plans in part of a 239-page application for the brine unit that it submitted to the AOGC.

CLICK THE PDF to see the document.

While parts of the document are highly technical, most of it details ownership of mineral rights and the efforts made to contact non-responsive mineral rights owners. The document lists those persons within the brine unit who have not leased their mineral rights, or who could not be contacted by Tetra.

During the remainder of 2023, Tetra will drill and complete an additional test well “to obtain additional brine samples and detailed well log data to potentially enhance the reservoir model, and potentially further optimize supply and injection well locations to more efficiently sweep the brine field.”

It will also begin detailed design work for a bromine processing facility.

Construction of a bromine plant will start in 2024. This will include drilling and completing the supply and injection wells.

Tetra estimates that each well will produce 5.475 million stock tank barrels of brine annually. A stock tank barrel is equal to 42 U.S. gallons. Estimated production is 547,500,000 stock tank barrels over 20 years.

Creation of the brine production unit will allow the company to proceed with construction of the bromine plant and brine production field. It also creates the framework to make mineral lease payments to property owners.

Tetra Technologies, in its AOGC presentation, noted that it holds about 40,000 acres in brine leases in the two counties. The presentation said that in December 2017, Tetra made an agreement to provide Standard Lithium with the option to acquire about 35,000 acres of lithium mineral rights.

“These options have not been exercised and are due to expire in 2027,” the presentation said.

Tetra Technology’s brine leases are located north of about 120,000 acres of brine releases acquired by Saltwerx working with Galvanic Energy. According to the Wall Street Journal, ExxonMobil recently bought Galvanic Energy’s brine leases for $100 million. ExxonMobil previously acquired Saltwerx.

Tetra’s brine leases north of the proposed Evergreen Brine Unit are largely those where Standard Lithium has an option for lithium production from the brine.

“Acreage to the south of Proposed Unit boundary is largely controlled by Saltwerx with Tetra owning additional leases in the Southeast area.

“The proposed unit is a good collaboration between Tetra and Saltwerx to optimize leases between Tetra leases to the north and Saltwerx leases to the south. Tetra and Saltwerx own about 90% of the proposed unit brine mineral rights,” the presentation said.

Formation of the Evergreen unit will trigger an agreement between Tetra and Saltwerx under which Tetra will transfer brine leases it holds south of the unit to Saltwerx.

“This will facility future potential (brine) units south of the (Evergreen) unit,” the presentation said.

Approval of the Evergreen Brine Unit will also further an agreement between Saltwerx and Tetra to reach a final investment decision around January 1, 2024.

“Saltwerx and TETRA are collaborating on the evaluation of Direct Lithium Extraction (DLE) technologies and are in late stages of due diligence to select the DLE provider. Tetra completed a Bromine FEED study at the end of last year and initiated a Lithium FEED study that is due for completion in November,” the AOGC presentation said.

Tetra Technologies said that the unit size is large enough to meet Tetra’s 20-year bromine demand requirements.

Also, the unit is small enough to reduce the technology risk for an early commercial U.S. Direct Lithium Extraction plant.

“We estimate the combined investment for the wells, pipelines, and both plants to be over $500 million, providing exceptionally good employment opportunities and benefits to lease holders and the State of Arkansas,” the presentation said.

There was no immediate word on when the Arkansas Oil and Gas Commission may approve Tetra Technology’s request to create the brine unit. The commission’s next meeting is August 22 in North Little Rock.

Tetra Technologies is scheduled to announce its second quarter 2023 financial results after the closing of the stock market today.

On Tuesday, Tetra will host a conference call at 9:30 a.m. to discuss the results. Brady M. Murphy, president and CEO, and Elijio V. Serrano, senior vice president and CFO, will host the call.

People may listen to the conference call by calling the toll-free phone number 1-888-347-5303. The conference call will also be available by live audio webcast. The news release will be available on the company's website prior to the conference call. A replay of the conference call will be available at 1-877-344-7529 conference number 2982082, for one week following the conference call and the archived webcast will be available through the company's website for 30 days following the conference call.

 

Permalink Reply by Skip Peel - Mineral Consultant on August 2, 2023 at 10:46

XOM Is Diversifying Well Beyond Oil

By Michael Lebowitz and Lance Roberts | August 2, 2023 | realinvestmentadvice.com

Link to article with map:  https://realinvestmentadvice.com/xom-is-diversifying-well-beyond-oil

Yesterday we learned that Exxon (XOM) is in talks with Tesla, Ford, and Volkswagen about supplying lithium. If that headline caught you off guard, here is the back story. Earlier this year, XOM bought the drilling rights for 120k acres of land in the Smackover formation, as shown below. The purpose is not shale oil, as many may suspect, but to produce lithium to feed the rapidly growing demand from EV manufacturers. XOM plans on constructing a lithium processing plant in Arkansas capable of producing 75k-100k metric tonnes annually. For context, the world’s largest producer Albermarle generates 225k metric tonnes annually. Global lithium production is expected to be near 1 million tonnes this year. XOM will be a significant lithium producer if its plans come to fruition.

Making the story more interesting, XOM bought pipeline operator Denbury Inc on July 13. Denbury pipelines will allow Exxon to transport and store carbon emitted from their lithium plant. XOM also has contracts to help CF Industries, Linde, and Nucor capture, move, and store the carbon emitted from their facilities. XOM is becoming much more than a traditional oil and gas company. They are smartly diversifying across many energy sectors to ensure they stay relevant as the world’s choice of energy changes. Per its Chairman and CEO Darren Woods: “ExxonMobil is committed to playing a leading role in the energy transition, and Advancing Climate Solutions articulates our deliberate approach to helping society reach a lower-emissions future.”

Permalink Reply by Rock Man on August 3, 2023 at 3:16

Interesting summary of this whole XOM effort.

Question I have is will they need new / revised lease terms for all this acreage to now extract lithium instead of O&G?

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