U.S. energy major Exxon Mobil XOM-N said on Tuesday it had signed a non-binding agreement to supply lithium from its proposed Arkansas project to South Korean EV battery maker SK On.
The agreement has the potential to be a multiyear offtake deal of up to 100,000 metric tons, the company said.
Exxon in November announced plans to produce lithium from pumped out brine in Arkansas, from regions considered to hold significant deposits of the metal.
On Monday, an Exxon Mobil executive said the company has no plans to expand into hard rock lithium mining and will stay focused on ways to extract the electric vehicle battery metal from salty brines found throughout the world.
“We are focused on our core competencies, which is subsurface fluids,” Patrick Howarth, head of Exxon’s lithium business, told the Fastmarkets Lithium Supply and Battery Raw Materials Conference in Las Vegas.
The company is deciding which direct lithium extraction (DLE) technology it will license to produce lithium in Arkansas and does not plan to create its own. “We don’t believe it’s expeditious for us to develop our own DLE technology,” he said.
SK On, a unit of SK Innovation, intends to use the lithium for making EV batteries in the U.S.
The company, which supplies to Volkswagen and Ford Motor, operates two facilities for making batteries in Georgia. It is building four more plants jointly with automakers.
“Through this partnership with ExxonMobil, we will continue strengthening battery supply chains in the U.S.,” said Park Jong-jin, executive vice president of strategic procurement at SK On.