ExxonMobil and LG Chem: A Strategic Lithium Partnership
Wednesday, Nov 20, 2024 6:11 am ET
3min read In a significant move towards domestic energy security and sustainability, ExxonMobil Corporation (NYSE: XOM) and LG Chem have signed a non-binding memorandum of understanding (MOU) for a multiyear lithium carbonate offtake agreement. This strategic partnership aims to strengthen the U.S. critical mineral supply chain, contributing to domestic energy security, manufacturing, jobs, and emission reductions.
The agreement, announced on November 20, 2024, outlines a plan for ExxonMobil to supply up to 100,000 metric tons of lithium carbonate to LG Chem's cathode plant in Tennessee. This plant, expected to be the largest of its kind in the U.S., will have an annual production capacity of 60,000 tons. The lithium will be sourced from ExxonMobil's planned project in the U.S., utilizing Direct Lithium Extraction (DLE) technology.
Dan Ammann, president of ExxonMobil Low Carbon Solutions, emphasized the importance of secure domestic lithium supply for critical minerals like lithium. He stated, "ExxonMobil is proud to lead the way in establishing domestic lithium production, creating jobs, driving economic growth, and enhancing energy security here in the United States."
Shin Hak-cheol, CEO of LG Chem, echoed Ammann's sentiment, highlighting the significance of building a lithium supply chain with one of the world's largest energy companies. He stated, "We will continue to strengthen LG Chem's competitiveness in the global supply chain for critical minerals."
The planned production of MobilTM Lithium will utilize Direct Lithium Extraction (DLE) technology, aligning seamlessly with ExxonMobil's core competencies in subsurface exploration, drilling, and chemical processing. This approach offers U.S. EV battery manufacturers a domestically extracted and processed lithium supply option with substantially lower environmental impacts, including approximately two-thirds less carbon intensity than hard rock mining.
The final investment decision for the project is subject to various factors, including the establishment of commercially competitive regulatory frameworks. As regulatory frameworks play a crucial role in the project's feasibility, supportive policies and incentives can accelerate the project's timeline and reduce costs, making it more attractive for investors.
Technological advancements, such as Direct Lithium Extraction (DLE), will play a pivotal role in the project's feasibility. DLE allows for lithium to be extracted from underground saltwater deposits more efficiently, with lower carbon emissions and less wasted water compared to traditional hard rock mining. This approach offers U.S. EV battery manufacturers a domestically extracted and processed lithium supply option with substantially lower environmental impacts.
In conclusion, the strategic partnership between ExxonMobil and LG Chem signals a significant step towards strengthening the U.S. critical mineral supply chain. By leveraging ExxonMobil's core competencies and LG Chem's expertise in battery materials, this collaboration aims to enhance domestic energy security, manufacturing, jobs, and emission reductions. As the project progresses, investors should monitor the regulatory environment and technological advancements to assess the potential and challenges of this strategic lithium partnership.
The agreement, announced on November 20, 2024, outlines a plan for ExxonMobil to supply up to 100,000 metric tons of lithium carbonate to LG Chem's cathode plant in Tennessee. This plant, expected to be the largest of its kind in the U.S., will have an annual production capacity of 60,000 tons. The lithium will be sourced from ExxonMobil's planned project in the U.S., utilizing Direct Lithium Extraction (DLE) technology.
Dan Ammann, president of ExxonMobil Low Carbon Solutions, emphasized the importance of secure domestic lithium supply for critical minerals like lithium. He stated, "ExxonMobil is proud to lead the way in establishing domestic lithium production, creating jobs, driving economic growth, and enhancing energy security here in the United States."
Shin Hak-cheol, CEO of LG Chem, echoed Ammann's sentiment, highlighting the significance of building a lithium supply chain with one of the world's largest energy companies. He stated, "We will continue to strengthen LG Chem's competitiveness in the global supply chain for critical minerals."
The planned production of MobilTM Lithium will utilize Direct Lithium Extraction (DLE) technology, aligning seamlessly with ExxonMobil's core competencies in subsurface exploration, drilling, and chemical processing. This approach offers U.S. EV battery manufacturers a domestically extracted and processed lithium supply option with substantially lower environmental impacts, including approximately two-thirds less carbon intensity than hard rock mining.
The final investment decision for the project is subject to various factors, including the establishment of commercially competitive regulatory frameworks. As regulatory frameworks play a crucial role in the project's feasibility, supportive policies and incentives can accelerate the project's timeline and reduce costs, making it more attractive for investors.
Technological advancements, such as Direct Lithium Extraction (DLE), will play a pivotal role in the project's feasibility. DLE allows for lithium to be extracted from underground saltwater deposits more efficiently, with lower carbon emissions and less wasted water compared to traditional hard rock mining. This approach offers U.S. EV battery manufacturers a domestically extracted and processed lithium supply option with substantially lower environmental impacts.
In conclusion, the strategic partnership between ExxonMobil and LG Chem signals a significant step towards strengthening the U.S. critical mineral supply chain. By leveraging ExxonMobil's core competencies and LG Chem's expertise in battery materials, this collaboration aims to enhance domestic energy security, manufacturing, jobs, and emission reductions. As the project progresses, investors should monitor the regulatory environment and technological advancements to assess the potential and challenges of this strategic lithium partnership.
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