ExxonMobil in talks to supply SK On with lithium chemicals

The oil giant ExxonMobil is in talks to supply lithium chemicals to the battery manufacturer SK On. The chemicals will come from a site in Arkansas where ExxonMobil will use direct lithium extraction (DLE) to chemically separate lithium from brine, a process that has yet to be widely deployed at large scale.

SK On is seeking a contract for up to 100,000 metric tons (t) of lithium chemicals over the course of several years. SK On would use the lithium at its two battery plants in Georgia and four other US plants it is building.

Andy Leyland, managing director of the battery supply chain research firm SC Insights, says the announcement shows that the companies have confidence in the project, but he cautions that such nonbinding discussions don’t always result in concrete deals. “It’s really just an agreement to keep talking,” he says.

Some other DLE firms that announced supply agreements are behind schedule or have closed down altogether. Lake Resources, which uses DLE technology supplied by Lilac Solutions, signed a deal in 2022 to supply 230,000 t of lithium chemicals to SK On over the course of a decade. That project was initially slated to open in 2024 in Argentina but is now delayed until 2027. In 2023, Compass Minerals agreed to supply Ford Motor with up to 4,400 t of lithium carbonate starting in 2025, but the company abandoned its project in Utah later that year.

Despite the risks associated with DLE, carmakers and battery manufacturers continue to bet on the technology. In Germany, Vulcan Energy Resources has supply agreements with Stellantis and LG Energy Solution. Controlled Thermal Resources has agreed to sell lithium from its DLE project in California to Stellantis. In April, Anson Resources agreed to supply 4,000 t of lithium chemicals to LG. None of those projects expect to deliver any lithium until at least 2025.

Leyland says ExxonMobil’s size and access to cash is an advantage that could help manage the risks associated with a big DLE project. “Big companies tend to know how to run big projects,” he says. “Most of this industry is junior miners who don’t currently have cash flow.