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ExxonMobil has defeated an attempt by rival Occidental Petroleum to block its production rights on one of the largest lithium deposits in the US, as oil companies fight for a foothold in the critical minerals business.
The regulatory battle in Arkansas between two of the largest US oil companies comes as the Trump administration rushes to boost domestic extraction and processing of critical minerals to break American industry’s reliance on Chinese supplies.
Lithium, a crucial ingredient in high-powered batteries used in the electric vehicle and defence industries, is a priority for Washington as Chinese companies process almost two-thirds of the world’s lithium supplies.
Exxon, Equinor and Occidental are among companies racing to develop lithium extraction and processing facilities in the Smackover, a geological formation stretching across Arkansas, Texas, Louisiana, Mississippi, Alabama and Florida.
A US Geological Survey study published in October estimated there was between 5mn and 19mn tonnes of lithium reserves in underwater brines in the south-west Arkansas portion of the Smackover. If commercially recoverable, this would meet the projected 2030 global demand for lithium in car batteries nine times over, it said.
Saltwerx and other producers in the Smackover intend to use direct lithium extraction technology, a process in which lithium is pulled out of brine while leaving other dissolved compounds behind.
There are still questions over whether the technology can be a commercial success when compared to hard rock lithium mining and evaporation ponds, a low-cost technique used in Latin America.
This week Saltwerx LLC, an Exxon subsidiary, was granted the right to establish a 56,000-acre lithium production unit by regulators over the objections of Occidental, which argued it owned minerals rights in the area and had plans to produce lithium.
An Exxon spokesperson said the decision could help unlock the domestic lithium industry, support jobs and strengthen American energy security.
“Attempts to delay progress could jeopardise economic growth for Arkansas and undermine US efforts to reduce dependence on foreign critical minerals,” she said.
Saltwerx intends to begin producing lithium in 2027. It forecasts that it can generate $27mn in annual profit from producing 165,000 barrels of lithium brine per day, according to a regulatory filing.
An Occidental spokesman said the company routinely participated in hearings with state regulators to develop operating agreements that ensured the responsible and fair development of resources for all interest owners.
The commission also approved an application by SWA Lithium, a joint venture between Standard Lithium and Equinor, to establish a rival production unit in south-west Arkansas. Last week the Trump administration selected it as one of 10 critical minerals projects that it would prioritise.
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