Nandini Roy Choudhury, writer
Brief news
- Major companies like Standard Lithium, Albemarle, and ExxonMobil are investing in Arkansas for lithium production, driven by rising global demand for energy storage and electric vehicles.
- The Smackover Formation holds significant lithium brine resources, with potential to supply millions of electric vehicles.
- Challenges include unproven extraction technology, falling lithium prices, and concerns over U.S. supply chain reliance on China.
Detailed news
Companies such as Standard Lithium, Albemarle, and ExxonMobil are making substantial investments in Arkansas, which is where the future of lithium production in the United States is gathering momentum.
This occurs at a time when worldwide hunger for lithium is on the rise, fueled by the demand for energy storage and electric vehicles. According to the United States Geological Survey, global lithium consumption increased from 142,000 metric tons in 2022 to 180,000 metric tons in 2023. However, the United States generates less than 1% of the global supply.
Although Australia, Chile, and China continue to supply the majority of the world’s lithium, Arkansas has the potential to alter this trend.
The Smackover Formation, a geological formation abundant in lithium brine, is located within the province.
Wesley Hamilton, CTO and vice president of research and technology at Albemarle, the world’s largest lithium producer, stated, “The quality of the lithium resources is truly what distinguishes this region.” “The concentration of lithium and the efficiency of its extraction from the brine are the determining factors.”
Bromine, which is extracted from the same brines that are currently being exploited for lithium, has been produced in Arkansas for an extended period. According to Galvanic Energy, the formation contains more than 4 million metric tons of lithium, which is sufficient to power millions of electric vehicles and other devices. This has sparked a surge in interest from companies seeking to leverage the formation’s potential.
Exxon Mobil, for instance, acquired 120,000 acres in the Smackover Formation in 2023 with the intention of commencing the production of battery-grade lithium by 2027. The organization declared that it will generate sufficient lithium to satisfy the demand for over one million electric vehicles annually by 2030. In addition to expanding its Direct Lithium Extraction (DLE) facility in El Dorado, Standard Lithium, which has been operating in Arkansas since 2020, has received a $100 million investment from Koch Strategic Platforms. DLE is promoted as a more environmentally favorable extraction method, as it employs sophisticated filtration to minimize water and energy consumption.
Nevertheless, the path ahead is not without obstacles.
While DLE technology is promising, it has not yet been proved on a large scale, and lithium prices have plummeted from over $80,000 per metric ton in 2022 to approximately $10,600 today. According to Benchmark, this is the result of novel battery technologies, slower-than-expected EV growth, and oversupply.
“Many standalone lithium companies are not generating the revenues they require, and lithium prices are plummeting,” stated Shon Hiatt, director of the Business of Energy Transition Initiative at the University of Southern California. “That volatility presents a significant obstacle for organizations that are seeking to expand.”
Furthermore, the Atlantic Council has expressed apprehension regarding the risks to the U.S. supply chain, as China currently maintains control over 80% of the global battery cell production.
Nevertheless, Albemarle and Standard Lithium, among other companies, expressed their confidence in Arkansas’ capacity to become a significant factor in the global lithium market in an interview with CNBC.
Robert Mintak, CEO of Standard Lithium, stated, “The United States must take action.” “We have identified the Smackover formation in Arkansas as the most promising resource for development.”
Source : CNBC News
