Exxon Mobil Corporation (NYSE:XOM) inked a non-binding memorandum of understanding (MOU) with SK On for a multiyear offtake agreement for up to 100,000 metric tons of Mobil Lithium from ExxonMobil's initial planned project in Arkansas.

The deal aligns with ExxonMobil's goal, announced in late 2023, to supply lithium for about one million EV batteries annually by 2030.

The company says that lithium demand is expected to surge due to its vital role in EVs, electronics, and energy storage.

Dan Ammann, President of ExxonMobil Low Carbon Solutions stated, "This collaboration with SK On demonstrates the leading role we play in the growing market for domestically sourced lithium, a market that's advancing energy security and climate objectives, as well as supporting American manufacturing."

ExxonMobil's Arkansas project will extract lithium from underground saltwater deposits and produce battery-grade material onsite, aiming for efficient, environmentally friendly production compared to traditional mining methods.

ExxonMobil will produce Mobil Lithium using its expertise in subsurface exploration, drilling, and chemical processing, offering U.S. EV battery makers a secure, lower-carbon lithium source.

Through appraisal drilling and a technology pilot with Direct Lithium Extraction (DLE), ExxonMobil has successfully obtained lithium carbonate from Arkansas' Smackover formation.

After 2025, SK On's annual production capacity in the U.S. is projected to exceed 180 GWh, sufficient to power approximately 1.7 million EVs annually.

Investors can gain exposure to the XOM via Energy Select Sector SPDR Fund (NYSE:XLE) and IShares U.S. Energy ETF (NYSE:IYE).

Also Read: Exxon Mobil Rakes In Billions from Guyana Oil Deal, Net Margin Tops Chip Giant: Report

Price Action: XOM shares are down 0.23% at $113.79 at the last check Tuesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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