Brine royalty cliffhanger
Oil company ExxonMobil has signed a non-binding lithium supply deal with battery chemicals company LG Chem regarding its proposed Smackover Formation project in Arkansas, US.Smackover is a geological formation extending from Florida to Texas that has historically been a source of oil, which also hosts lithium resources.ExxonMobil plans to extract lithium from Smackover brine using direct lithium extraction technology.
Other energy companies are also looking to diversify into lithium, including Equinor, Occidental Petroleum, and Chevron.RoyaltyThe conclusion of a final agreement, including pricing, first requires Arkansas to establish a royalty rate for lithium production. In early November, the Arkansas Oil and Gas Commission rejected a 1.82% royalty rate proposed by five companies , requiring them to submit another proposal.
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