How oil-rich Arkansas turned a hotbed of lithium mining

The way forward for lithium manufacturing within the U.S. is gaining momentum in Arkansas, as corporations like ExxonMobil, Albemarle, and Standard Lithium make vital investments within the state.

This comes at a time when world demand for lithium, pushed by electrical autos and energy-storage wants, continues to develop. In 2023, world lithium consumption reached 180,000 metric tons, up from 142,000 metric tons in 2022, based on the US Geological Survey. However the U.S. produces less than 1% of the world’s provide.

Whereas many of the world’s lithium nonetheless comes from international locations like Australia, Chile and China, Arkansas may change that. 

The state is house to the Smackover Formation, a geological formation wealthy in lithium brine.

“Lithium useful resource high quality is actually what makes this an awesome area,” mentioned Wesley Hamilton, CTO and vp of analysis and expertise at Albemarle, the world’s high lithium producer. “It comes down to 2 issues: the focus of lithium and the power to extract it effectively from the brine.”

Arkansas has lengthy been a producer of bromine, which is extracted from the identical brines now being tapped for lithium. The formation holds over 4 million metric tons of lithium, which is sufficient to energy thousands and thousands of EVs and gadgets, based on Galvanic Energy. That has attracted a rush of curiosity from corporations seeking to capitalize on the formation’s potential.

Exxon Mobil, for instance, acquired 120,000 acres within the Smackover Formation in 2023 and goals to start out producing battery-grade lithium by 2027. The corporate mentioned it should produce sufficient lithium to provide the manufacturing greater than 1 million EVs per yr by 2030. Normal Lithium, which has operated in Arkansas since 2020, can also be increasing its Direct Lithium Extraction (DLE) facility in El Dorado, because of a $100 million investment from Koch Strategic Platforms. DLE is touted as a extra eco-friendly extraction technique, utilizing superior filters to scale back vitality and water utilization.

Nonetheless, the highway forward is not with out challenges.

DLE technology, whereas promising, has but to be confirmed on a big scale, and lithium costs have dropped sharply from over $80,000 per metric ton in 2022 to round $10,600 at this time. That is because of oversupply, slower-than-expected EV development and new battery applied sciences, based on Benchmark.

“Lithium costs are falling precipitously, and plenty of standalone lithium corporations should not producing the revenues they want,” mentioned Shon Hiatt, director of the Enterprise of Vitality Transition Initiative on the College of Southern California. “That volatility is an enormous problem for corporations making an attempt to scale up.”

Moreover, China controls 80% of world battery cell manufacturing, based on the Atlantic Council, elevating issues about U.S. provide chain dangers.

Nonetheless, corporations like Albemarle and Normal Lithium informed CNBC they continue to be optimistic about Arkansas’ potential to grow to be a key participant within the world lithium market.

“The USA has to step up,” mentioned Robert Mintak, CEO of Normal Lithium. “We have focused the Smackover formation in Arkansas as a result of we imagine it is the perfect useful resource to develop.”

Watch the video to study extra about how Arkansas is positioning itself on the forefront of U.S. lithium manufacturing and what it means for the way forward for the vitality market.