Saudi Aramco and Abu Dhabi National Oil Company (ADNOC), the state oil giants of two of OPEC's top producers, are in very early stages of working to extract lithium from the brine in their huge oilfields in the Middle East, Reuters reported on Friday, citing three anonymous sources with knowledge of the plans.
The two major Gulf oil producers have been seeking to diversify their revenues streams and tap other profitable operations apart from oil, to fund their massive state programs and, in Saudi Arabia's case, the Vision 2030 plan of Crown Prince Mohammed bin Salman, which includes billions of U.S. dollar spending on futuristic projects in the Saudi deserts.
Aramco and ADNOC will be using some kind of direct lithium extraction (DLE) technology, the sources told Reuters but declined to elaborate.
DLE avoids open-pit mining or the traditional process of extracting lithium from brine through evaporation ponds, but the technology is in its early stages.
If Aramco and ADNOC do go for lithium extraction, they wouldn't be the first oil giants to do so.
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U.S. supermajor ExxonMobil has made inroads into the lithium extraction industry. While doubling down on crude oil production, especially closer to home, ExxonMobil unveiled plans in November to produce lithium in Arkansas, aiming to become a leading supplier of the key metal for electric vehicles (EVs) by 2030. The company has already begun work on a first phase of its North American lithium production in southwest Arkansas, an area known to hold significant lithium deposits.
The current lithium market and economics are depressing for the industry, but the long-term prospects for the key battery metal remain bright.
In the lithium market, slowing growth in electric vehicle sales and an oversupply sent lithium prices crashing by 80% in the past year, prompting lithium miners to pause and scale back expansion projects.
The crash in lithium prices is holding back reinvestment in new supply, the world's largest lithium producer, Albemarle, says.
Yet, the deferral of new supply developments amid the low prices is setting the stage for the next lithium supply crunch later this decade, according to executives and analysts.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com More