US Poised for Lithium Boom Thanks to Huge Discoveries and Green Mining Technology
Over the past few years, several firms announced having discovered substantial #lithium deposits in the region surrounding the Texas-Arkansas border. The consecutive discoveries seem to indicate the presence of a lithium vein which has been dubbed as the Smackover Formation.
As luck would have it, a native Texan John Burba filed a patent for Direct Lithium Extraction (#DLE), a novel technique which improves efficiency and decreases environmental impact as far back as 1995. At the time, his invention did not find any applications in the USA. But little did he know that his invention would be brought back from the dead some three decades later.
In July 2023, during its investor conference, ExxonMobil (XNYS: XOM) CEO Darren Woods announced that the company is ‘actively pursuing business in new green energy sector.’ This declaration is backed by the recent acquisition by ExxonMobil of the lithium mine — which is part of the Smackover formation — in Arkansas for USD 100 million.
In October 2023, Standard Lithium (XASE: SLI; TSXV: SLI) reported that its drilling hit ‘significant concentrations amounts of high-grade lithium brine.’ The concentration level was measured at 806 mg/L, setting a new record for North America.
“The potential for increased US production to replace imports [of lithium] has implications for employment, manufacturing and supply chain resilience. This study illustrates the value of science in addressing economically important issues.”
USGS Director David Applegate
Southwest Arkansas and Northeast Texas are adjacent to each other. Based on these discoveries, the region is poised to become the ‘Ground Zero’ for lithium production in the USA. Given the excitement around lithium, Texas is turning out to be focal point of the new ‘Gold Rush’ in the 21st century.
In October 2024, the United States Geological Survey (USGS) released its latest study which estimates that the Texas-Arkansas border region may contain between 5 to 19 million tonnes of lithium. If proven and produced, the amount would be equivalent to nine times the projected global demand for lithium through the year 2030.
Already, International Battery Metals (TSXV: IBAT) announced its first operational lithium mine using DLE back in July 2024. ExxonMobil has also already entered into an offtake agreement with SK On (KS: 034730), a South Korean manufacturer of lithium-based batteries for electric vehicles (#EV).
“We estimate there is enough dissolved lithium present in that region to replace US imports of lithium and more.”
USGS Hydrologist Katherine Knierim
It seems abundantly clear that there is a potential for the Smackover lithium vein to play a key role in realizing the objective of the US to diversify and derisk the supply chains for #CriticalMinerals in the broader context of the cut-throat race to dominate the global #EV market.