The largest oil producer in the West, ExxonMobil, has introduced that it’s making a serious strategic shift in the direction of lithium manufacturing, with plans to start lithium manufacturing in 2027. The company is leveraging its drilling and processing experience to turn out to be a key participant in the battery metals business.
On Monday, ExxonMobil introduced that it has begun mining lithium in the state of Arkansas, having acquired the rights to 120,000 hectares of land in the space. Dan Amman, head of Exxon’s low-carbon options enterprise, expressed optimism about the enterprise’s profitability and progress potential. He emphasised that the venture may make use of the company’s current expertise and data.
The shift to renewable vitality sources has led to a surge in demand for batteries akin to lithium. The International Energy Agency predicts that consumption might enhance greater than 40 occasions between 2020 and 2040 resulting from the fast unfold of lithium-ion batteries utilized in electrical autos and vitality storage.
While ExxonMobil didn’t disclose the precise quantity of the funding in the new enterprise, referred to as Mobil Lithium, Amman indicated that it could be in the billions. ExxonMobil closed a $60 billion deal final month to purchase Pioneer Natural Resources, the largest oil producer in Texas.
ExxonMobil is the first oil producer to enter lithium manufacturing. Other corporations akin to Koch Industries, Occidental Petroleum and Norway’s Equinor are contemplating comparable strikes. Exxon believes that its experience in drilling, pumping and processing oil and fuel will give it a aggressive benefit in lithium manufacturing.
Its European opponents, BP and Shell, on the different hand, are turning to the wind and photo voltaic vitality companies, however ExxonMobil and Chevron chorus from investing in renewable vitality sources, as a result of they don’t have the obligatory data. Instead, they targeted their priorities on inexperienced applied sciences carefully associated to their conventional enterprise.
ExxonMobil goals to start business manufacturing by 2027 and ramp up manufacturing by 2030 to offer sufficient lithium to energy a million electrical autos yearly. Amman acknowledged that the company needs to compete with the greatest gamers in the world.
Cover picture credit score: Michael Nagle/Bloomberg through Getty Images