Exxon Quietly Joins Search For Lithium: Report
Exxon Mobil (NYSE: XOM) has started to prepare for a future that will be significantly less reliant on gasoline.
Exxon recently purchased drilling rights to a sizable chunk of Arkansas land from which it aims to produce the mineral, a key ingredient in batteries for electric cars, cellphones, and laptops, reported the Wall Street Journal, citing people familiar with the matter.
According to the sources, lithium is far removed from the fossil-fuel business, which has powered Exxon's profits for over a century. It signals the company's assessment that demand for internal combustion engines could soon peak.
The report mentions that Exxon acquired 120,000 gross acres from Galvanic Energy, an exploration firm, in the Smackover formation of southern Arkansas, for more than $100 million.
Galvanic said last year that a third-party consultant it hired estimated the prospect could have 4 million tons of lithium carbonate equivalent to power 50 million EVs, added the report.
Exxon has plans to spend $17 billion through 2027 on cutting carbon emissions and developing low-carbon technologies, mentioned WSJ.
Exxon's CEO, Darren Woods, said last year that heavy industry, heavy transportation, and the production of chemicals would drive demand for fossil fuels for decades to come.
Lithium production would also diversify Exxon's portfolio and expose them to a market that is expanding quickly. The company is setting up other facets of its operations to support electric automobiles.
Price Action: XOM shares are trading higher by 0.20% at $106.46 on the last check Monday.
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