These days, companies in the area aren’t looking to find more oil—they are instead prospecting for lithium, a metal that is increasingly prized around the world as an essential ingredient in electric-vehicle batteries.
If the U.S. is to ease its dependence for lithium on other countries such as China, it may need this quiet corner of southwest Arkansas to lead the way.
Exxon MobilXOM 1.76%increase; green up pointing triangle, a new player in the hunt for U.S. lithium, is planning to build one of the world’s largest lithium processing facilities not far from Magnolia, with a capacity to produce 75,000 to 100,000 metric tons of lithium a year, according to people familiar with the matter.
At that scale, it would equate to about 15% of all finished lithium produced globally last year, according to one analyst.
The Wall Street Journal reported in May that Exxon purchased 120,000 gross acres in the area for a price tag of more than $100 million. A consultant for the seller had estimated the prospect could have the equivalent of 4 million tons of lithium carbonate equivalent, enough to power 50 million EVs.
The attraction is what is known as the Smackover formation, a geologic trend that runs from Texas to Florida and is rich with saltwater brine, which once bedeviled companies drilling for oil. That brine also contains small amounts of lithium, and the companies are increasingly optimistic they can scale up technologies to extract it.
Mining companies’ efforts to shore up domestic supplies have run into hurdles in recent years. But companies drilling for lithium say their extraction methods are cleaner than traditional mining, and face fewer regulatory risks.
In an interview at a lithium demonstration plant near El Dorado, Ark., Standard Lithium Chief Executive Robert Mintak said the Smackover could become as significant to domestic lithium production as the Permian Basin of West Texas and New Mexico has been for U.S. oil output.
