(Bloomberg) -- Exxon Mobil Corp. signed a preliminary agreement to supply South Korean battery-maker SK On Co. with lithium from a deposit it’s developing in Arkansas, deepening the oil major’s connections to the rapidly growing electric-vehicle industry.

The multiyear deal will cover the sale of as much as 100,000 tons of lithium, and will support Exxon’s ambition to supply raw materials for about 1 million EV batteries a year by 2030, the company said in a statement.

Exxon announced its move into lithium at the peak of a rally in battery metals in a rare effort to diversify away from oil and gas. It’s ploughing ahead with the expansion, despite a slump in prices and a growing backlash against electric vehicles in the US.

“The world needs more lithium to support its emissions goals, and we’re doing our part to drive solutions forward in the United States,” said Dan Ammann, president of ExxonMobil Low Carbon Solutions. 

Exxon plans to bring its first lithium project online in 2027 and says potential customers still see a surge in demand for the metal key to powering EVs toward the end of the decade. It plans to employ a method called direct lithium extraction that’s not currently deployed at scale, raising risks over the timing and cost of its entry into the market. It will use a third party to speed up the process.

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