Exxon Mobil is betting big on lithium

In an effort to reposition itself long-term for the advent of EVs, Exxon Mobil is embracing a familiar concept: drill, baby, drill. Yesterday, the oil giant announced it’s starting to drill for lithium at a mine in southwest Arkansas, and aims to become a major US supplier for EV battery-makers by 2030.

Exxon acquired the mining rights to 120,000 acres near Magnolia, Arkansas, earlier this year for a reported price north of $100 million. At the time, a consultant for the seller estimated the land contained ~4 million tons of lithium carbonate equivalent, or enough to power 50 million EVs.

• Mining output: Exxon said it expects to supply enough lithium to enable the production of 1+ million EVs/year by the end of this decade.
• Mining cost: The construction cost to get to that point? A cool ~$5 billion.

Fun fact: Magnolia, Arkansas, is the proposed location for two other major lithium extraction plants in addition to Exxon’s. Collectively, the three projects would require ~6,000 workers – equivalent to roughly half of Magnolia’s entire population.

📸 Big picture: Lithium prices have fallen by more than 70% so far this year, per data published last week by CME Group. Analysts largely attribute the sharp decrease to a recent surge in new lithium supplies hitting the market, combined with lower-than-expected global demand for EVs over the past year.