The global lithium industry welcomes the entry of energy giants

The electric vehicle boom has been set off around the world, and lithium has become the “oil of the new energy era”, attracting many giants to enter the market.

On Monday, according to media reports, energy giant ExxonMobil is currently preparing for the “prospect of reduced oil and gas dependence” as it tries to tap a key resource other than oil: lithium.

ExxonMobil has bought the rights to 120,000 acres of land in the Smackover reservoir in southern Arkansas from Galvanic Energy for at least $100 million, where it plans to produce lithium.

The report pointed out that the reservoir in Arkansas may contain 4 million tons of lithium carbonate equivalent, enough to power 50 million electric vehicles, and Exxon Mobil may start drilling in the area in the next few months.

The ‘classic hedge’ of falling oil demand

The shift to electrifying vehicles has sparked a race to lock in supplies of lithium and other materials central to battery manufacturing, attracting a host of giants, with ExxonMobil at the forefront. Lithium production is expected to diversify ExxonMobil’s portfolio and give it exposure to a fast-growing new market.

In switching from oil to lithium, ExxonMobil says it has a technological advantage. Extracting lithium from brines involves drilling, pipelines and liquids processing, and oil and gas companies have long amassed a wealth of expertise in those processes, making them ideally suited to transition to producing the mineral, lithium and oil industry executives say.

Pavel Molchanov, an analyst at investment bank Raymond James, said:

The prospect of electric vehicles becoming dominant in the coming decades has provided oil and gas companies with a strong incentive to get involved in the lithium business. This is a “classic hedge” against the outlook for lower oil demand.

In addition, Exxon Mobil predicted last year that light-duty vehicle demand for fuel for internal combustion engines could peak in 2025, while electric, hybrid and fuel-cell vehicles could grow to account for 50 percent of new vehicle sales by 2050. %above. The company also predicts that the global number of electric vehicles could rise from 3 million in 2017 to 420 million by 2040.

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Tesla breaks ground on Texas lithium refinery

Not only Essenke Mobil, but Tesla is also building a lithium smelter in Texas, USA. Not long ago, Musk held a groundbreaking ceremony for the lithium refinery in Texas.

It is worth mentioning that at the ceremony, Musk emphasized more than once that the lithium refining technology he uses is a technical path different from traditional lithium refining. , it will not be affected in any way.”

What Musk mentioned is very different from the current mainstream practice. Regarding his own lithium refining technology, Turner, the head of Teslas battery raw materials and recycling, gave a brief introduction at the groundbreaking ceremony. Teslas lithium Refining technology will reduce energy consumption by 20%, consume 60% less chemicals, so the total cost will be 30% lower, and the by-products produced during the refining process will also be harmless.

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Post time: Jun-30-2023