America’s Lithium Industry Can Lead The World—If We Protect Its Growth

Jack Conness, an Energy Innovation Policy Analyst, authored this piece.

On November 12^th , Exxon Mobil CEO Darren Woods did something unexpected while attending this years United Nations Climate Change Conference–– he publicly called for the Trump Administration to remain in the Paris Agreement and to pump the brakes on repealing the Inflation Reduction Act (IRA). Despite being one of the largest oil and gas producers in the world, Exxon Mobil has begun to diversify their energy investments to include the raw materials needed for an electrified transportation future. Namely, critical minerals like lithium.

Lithium’s success in 2024 is clear bright spot that clearly demonstrates the U.S. can compete in the global clean energy economy. As the fate of electric vehicle policies in the U.S. remains uncertain, the rest of the world continues on the path to cutting carbon emissions. And the private sector is moving swiftly to meet growing demand for zero-carbon technologies and materials. But seizing the early momentum and translating it into long-term economic success requires a predictable policy landscape.

Progress indicators for U.S. lithium resources

All signs pointed to 2024 being the year for American lithium. As it turns out, it was true. Just a week after Woods made his comments, Exxon Mobil announced it signed a lithium supply deal with LG Chem – sending 100,000 tons of its Arkansas lithium carbonate to LG Chem’s new battery facility in Tennessee (LG Chem cites the IRA as a reason for investment). This is on top of a June lithium supply deal Exxon Mobil inked with battery maker SK On to ship its Arkansas lithium to Georgia and other parts of the country .

In October, the United States Geological Survey announced an estimated 5 to 19 million tons of lithium resources are located beneath southwestern Arkansas. “If commercially recoverable, the amount of lithium present would meet projected 2030 world demand for lithium in car batteries nine times over.” For context, the most recent USGS assessment had U.S. lithium resources at 14 million tons. Potentially doubling U.S. lithium resources to 28 million tons would give the U.S. nearly a quarter of known worldwide resources, and, if all else remains constant, would mean the U.S. has the greatest lithium resources in the world.

Thanks to the IRA, the lithium train has left the station

The U.S. lithium industry secured major wins in 2024. The Biden administration gave final approval to Ioneer’s Nevada lithium mine at Rhyolite. The project will also be the recipient of a $700 million loan from the Department of Energy to build an on-site lithium carbonate processing facility. Lithium Americas’ project at Thacker Pass – originally approved by the Trump administration – closed on a $2.26 billion loan in October to build their lithium carbonate processing facility. They also finalized a $625 million deal with General Motors to supply the auto manufacturer with their lithium. Collectively, these two projects estimate they will process enough lithium for over 1 million EVs a year.

In addition, the U.S. Department of Treasury clarified extraction costs can qualify for the Advanced Manufacturing Production Credit (45X). Funding from the Bipartisan Infrastructure Law has continued to allocate billions of dollars to lithium and other mineral extraction, processing, and recycling projects across the country. Albemarle introduced plans in June to reopen their Department of Defense-backed lithium mine in Kings Mountain, North Carolina. It was hard not to find U.S. lithium updates in the news in 2024.

Uncertainty on the horizon

While 2024 was clearly a banner year for lithium, three looming unknowns could slow or halt progress: prices, processes, and an incoming Trump administration.

First, lithium and battery prices are at an all-time low, which has reduced the cost of electric vehicles and bolstered global EV sales. But these low prices deter investments in the raw materials. Such a dynamic is troublesome for an industry that currently lacks producer diversity and is expected to grow 8x by 2040. Albemarle, who operates the only major lithium mine in the U.S., lost more than $1 billion this year on falling lithium prices and had to pause their $1.3 billion processing facility in North Carolina. Considering it can take a decade for mineral mines to be planned, permitted, built, and begin production, lithium projects are not as flexible as ever-changing global market prices.

Second, the process for extracting lithium varies from mine to mine. For instance, Exxon Mobil’s lithium project in Arkansas is pursuing Direct Lithium Extraction to get its lithium out of the ground. DLE is marketed for its efficiency, effectiveness, and significantly reduced environmental footprint. But, it remains unproven at commercial scale. While DLE may be the next-generation extraction technology, that future has yet to be decided.

Lastly, the Trump administration and the 118^th Congress are likely to make sweeping changes. But how these changes impact the future of domestic mineral mining and processing remains unknown. During the first four years of the Trump administration, they began to build out the U.S. domestic mineral supply chain. This included an executive order to create the country’s first critical minerals list, the release of a federal strategy report to secure critical minerals, and signing the Energy Act of 2020 into law that directed the Department of Energy and Interior to expand upon important mineral lists and research. There was also the aforementioned approval of the Lithium Americas project in Nevada. Repealing legislation like the IRA would only hurt this growing industry.

Lithium’s growth needs protection

All in all, 2024 was an excellent year for American lithium. It’s clearer than ever that the U.S. has a golden opportunity to take advantage of its natural resources, lead mining and refining processes in an environmentally-responsible way, and reap major economic benefits as the world transitions to a clean energy-based economy. But it remains to be seen what the upcoming years will look like for the industry – especially in the U.S.