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  August 28th, 2023 | Written by

Arkansas could be the Future of US Lithium Production

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Exxon Mobile is bullish on Arkansas. But neither oil nor gas is a driving factor. The southwest region of Arkansas is rich in saltwater brine. Once a thorn in the side of oil companies, saltwater brine is now highly sought-after principally due to what can be extracted from it – lithium. 

When a lithium-rich brine aquifer is discovered, the salty water is pumped to the surface (roughly 8,000 feet) where the lithium is then separated from the brine. This results in a lithium concentrate solution that is crystalized into lithium hydroxide, a battery-grade product for electric vehicle batteries. In May Exxon Mobile purchased 120,000 gross acres in southwest Arkansas for north of $100 million. The Texas giant is now rumored to be constructing one of the world’s largest lithium processing facilities close to Magnolia, a town of just 12,000 inhabitants. The facility would have the capacity to produce up to 100,000 metric tons of lithium per year, the equivalent of approximately 15% of the finished lithium produced globally last year. 

The Permian Basin of West Texas and New Mexico was a boon for US oil. Some are positing that Southwest Arkansas has the potential to be even more favorable in terms of the expected lithium output. In general, drilling for lithium is cleaner than traditional mining and this should result in fewer regulatory snafus. Yet, companies like Exxon must invest heavily in the technology used to siphon lithium from brine and the costs are significant. 

One firm estimates it would cost in the neighborhood of $1.5 billion to construct 25,000 metric tons of capacity. Standard Lithium is analyzing a proposal to build the first commercial lithium extraction facility in the US. The capacity would be 6,000 metric tons per year and they’ve proposed a 30,000-ton plant near Magnolia. 

Small-town mayors like Mr. Parnell Vann of Magnolia are fervent seekers of job creators. What Exxon Mobile and others could bring is significant, especially since the 1980s oil bust and a host of mill closures had decimated the region. Yet, some feel the town isn’t ready, citing the disrepair of water and sewage systems, a shortage of new homes, and limited roads. Estimates point to a potential of 6,000 jobs and roughly 1,600 trucks by 2028. An influx of this size would expand the city considerably. 

Exxon has been diligently preparing for a gasoline-light future. They have been in conversations with EV and battery manufacturers and approximate demand for EVs and hybrids powered by fuel cells to reach over 50% of new auto sales by 2050.