Oil companies are betting on lithium: key in the green transition

The major oil companies are showing a growing interest in lithium, the white mineral that has become a key component in the transition to a greener and more sustainable economy. Companies such as ExxonMobil, Occidental Petroleum, and Equinor have begun to invest in this resource, seeing it as a lucrative opportunity in the electric vehicle market and clean energy technologies. ExxonMobil's move towards lithium has been reflected in various concrete actions, such as signing a preliminary agreement to supply lithium to SK On, a South Korean firm that manufactures batteries for electric vehicles for Ford and Hyundai. Additionally, the company has started lithium extraction operations in Arkansas, with the ambition to produce enough lithium for one million electric vehicles per year by 2030. The bet on lithium has also been backed by other oil companies, such as Occidental Petroleum, which established a joint venture with BHE Renewables, a subsidiary of Berkshire Hathaway, and Equinor, which formed a partnership with Standard Lithium. Even major global oil companies, such as Aramco and ADNOC from Saudi Arabia and the United Arab Emirates respectively, are exploring opportunities in the lithium market. The enthusiasm of these companies for lithium makes sense, as demand for this mineral is expected to increase as more sectors adopt electric technologies. Oil companies have emphasized that their experience in extracting natural resources, such as oil, gives them an advantage in lithium mining, as many of the necessary skills and technologies are transferable. The refining of extracted lithium also presents similarities with petrochemical processes, facilitating the integration of oil companies into this new market. In addition, innovative technologies are being used for lithium extraction and refining, which could reduce costs and production times, as well as decrease the environmental impact of these operations. However, there are challenges and risks associated with this foray into the lithium market. Price volatility and competition with companies specialized in lithium extraction are some of the obstacles that oil companies will have to face. Despite this, major oil companies seem willing to take on these challenges, given their strong financial position and track record of innovation in response to market demands. The example of ExxonMobil, which ventured into battery technology decades ago, shows that these companies have the ability to adapt to changes in the energy industry. With the support of smart technologies and a focus on sustainability, oil companies could play a significant role in the development of the lithium market and the transition to a cleaner and more energy-efficient economy. As the demand for electric vehicles and electronic devices continues to rise, lithium emerges as a fundamental strategic resource in the global energy landscape. The bet of major oil companies on this mineral could not only diversify their operations, but also contribute to building a more sustainable and resilient industry in the future.