SK On sign lithium supply deal with ExxonMobil
The non-binding letter of intent signed by the two companies opens the door for SK On to enter into a multi-year purchase agreement for up to 100,000 tonnes of lithium from ExxonMobil’s first planned project in Arkansas. SK On plans to use lithium for its battery cell production for EVs manufactured in the USA.
SK On currently operates two battery factories in Georgia and has three more under construction together with Ford. BlueOval SK, a joint venture between the two companies, further plans to run two battery plants in Kentucky, and one factory in Tennessee. There is also another ongoing cooperation with Hyundai in Georgia. By 2025, SK On intends to reach a production capacity of over 180 GWh in in the USA, which is sufficient for approximately 1.7 million electric vehicles.
ExxonMobil’s lithium production comes from Arkansas through “the appraisal drilling program and technology pilot using Direct Lithium Extraction (DLE) technology.” The project extracts the lithium from underground saltwater deposits and then directly converts it into battery-grade material onsite. This is more efficient and produces less waste and emissions than traditional mining.
“The world needs more lithium to support its emissions goals, and we’re doing our part to drive solutions forward in the United States,” said Dan Ammann, President of ExxonMobil Low Carbon Solutions. Park Jong-jin, Executive Vice President of Strategic Procurement at SK On added: “SK On has been working with global partners to secure key battery raw materials in a move to support our growing U.S. manufacturing base and lead electrification in the region.”
SK On is not the only company that ExxonMobil is considering working with. Last year in August, insiders leaked that ExxonMobil was negotiating with Tesla, Ford, Volkswagen and other carmakers about the supply of lithium, also saying that the talks are still at an early stage. The potential deal with SK On was mentioned at the time, as well as potentially Samsung SDI and lithium producer Albemarle.
ExxonMobil acquired the drilling rights for the land at the end of May 2023, allowing for the approximately 48.5 hectares in southern Arkansas to be mined for a price of 100 million dollars.
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