(Bloomberg) -- Exxon Mobil Corp. has signed a preliminary agreement to provide battery metal lithium to an LG Chem Ltd. plant in the US, strengthening the oil major’s role in the domestic critical minerals supply chain.
The multiyear deal will cover the supply of as much as 100,000 tons of lithium carbonate from Exxon’s planned project in the US to the South Korean company’s cathode plant in Tennessee, which broke ground last December, Exxon said in a statement. It follows a similar agreement between Exxon and SK On Co., another Korean battery maker, in June.
Exxon’s lithium strategy, announced in November 2023, is in line with a US government plan to reduce reliance on China for critical minerals that are key to energy transition. However, prices of the silvery, white metal have plunged since late 2022 on oversupply and a slowdown in demand growth for electric vehicles.
“It’s definitely a challenging market right now,” Patrick Howarth, Exxon’s lithium global business manager, said in an interview. But “the world needs a lot more lithium in the future than it’s producing today. So this is about how do we position our projects in North America in such a way that they can be there to supply North American demand as it increases over time.”
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