The Italian energy conglomerate Eni is advancing its strategy of business diversification, moving to reduce its reliance on traditional oil and gas revenues.

Aerial view of EnergyX's 'Black Giant' lithium project in Chile.

Key Details

Italian energy major Eni (ticker: ENI, down 0.27%) has announced a $225 million investment to acquire a 25% stake in the 'Black Giant' lithium project in Chile, owned by US technology company Energy Exploration Technologies (EnergyX). This move significantly increases Eni's involvement with the American startup and marks a formal expansion into the electric vehicle battery and critical minerals sector.

Upon completion of the equity acquisition, Eni will be entitled to up to a quarter of the lithium output from the 'Black Giant' project. With market forecasts predicting a substantial surge in demand for lithium raw materials, these resources are intended to supply a major battery manufacturing plant Eni is constructing in southern Italy.

Eni's venture capital arm first invested in the Austin-based EnergyX approximately three and a half years ago during a funding round led by General Motors.

In an official statement, Eni said, "This transaction aligns with our strategy to diversify our supply chain. Through this partnership, we are securing a large-scale, technologically advanced, and strategically located lithium project, strengthening our integrated position across the critical minerals value chain."

Clara Andreotti, CEO of Eni's venture capital division, described the investment as being of significant strategic importance.

In recent years, Eni has been actively positioning itself in the clean energy transition to lessen its revenue dependence on oil and gas:

The company established a joint venture with Seri Industrial, targeting an annual production capacity of over 8 GWh for LFP batteries and aiming to capture more than 10% of the European energy storage battery market. In May of this year, Eni completed a $70 million investment in Canadian graphite company Nouveau Monde Graphite, another critical raw material for EV batteries.

Traditional oil majors like ExxonMobil and Chevron have also entered the lithium industry in recent years. The sector widely views energy companies as a natural fit for lithium extraction, as the process logic for extracting lithium-rich brine from underground reservoirs is highly similar to oil and gas extraction.

The 'Black Giant' project will utilize EnergyX's proprietary Direct Lithium Extraction (DLE) technology. This new process offers higher extraction efficiency compared to traditional methods that rely on prolonged evaporation in artificial salt ponds.

The International Energy Agency (IEA) has stated that DLE technology has the potential to revolutionize lithium production. The agency also forecasts continuously surging lithium demand, predicting a global supply gap for lithium raw materials in the 2030s.

Located in the Antofagasta region of northern Chile, the project will be developed in two phases. Upon full completion of both phases by 2030, it is expected to produce 52,500 tonnes of lithium carbonate annually. The first phase, with a planned annual capacity of 7,500 tonnes, is scheduled to commence operations in 2028.

Eni will be deeply involved in the project's technological development and daily operational management and will secure a seat on the project's board of directors.

Guido Brusco, Eni's Chief Operating Officer for Natural Resources, stated, "Eni's contribution extends far beyond financial investment. The project's operational logic closely aligns with our upstream oil and gas business. Our mature core competencies in subsurface exploration, drilling, and resource extraction can be fully leveraged for the project, covering the entire process from well development and brine extraction to refining lithium-rich brine into final product."

Teague Egan, founder of EnergyX, noted that the US Export-Import Bank has issued a letter of interest for $690 million in project financing. Eni's current investment completes the full funding required for the project's development.

According to EnergyX's estimates, the total investment for the first two phases of the project is approximately $820 million, with potential for further capacity expansion in the future.

Egan commented, "This is a pivotal milestone that will determine the future trajectory of EnergyX."

Industry Context

Following a significant downturn in the lithium sector, demand for energy storage equipment is projected to surge by 2026, driving a recovery in lithium prices.

Data from research firm Benchmark Mineral Intelligence indicates that, measured in constant 2026 US dollars, the global lithium market was valued at around $5.6 billion in 2018 and is projected to climb to $35 billion by 2030. Based on demand and price forecasts, the market size could reach $90 billion by 2036.

The United States is actively building a domestic lithium supply chain to reduce reliance on China, which dominates the global battery industry. Egan stated that EnergyX is working closely with the US government to ensure that lithium from the 'Black Giant' project supports the critical mineral supply chain security of the US and its allies.

Egan revealed that EnergyX has already signed multiple offtake agreements for the project's future lithium output but did not disclose partner details due to confidentiality requirements.

In late 2023, EnergyX secured lithium mining rights covering over 100,000 acres around the Salar de Punta Negra in Chile. The company's brine pilot plant has accumulated nearly 10,000 hours of operation, and a demonstration plant with an annual capacity of 170 tonnes is set to commence production soon.

The project still requires specific Chilean mining permits (CEOL) and environmental approvals, with the company aiming to complete all formalities by mid-2027.

In addition to the Chilean project, EnergyX is simultaneously advancing several lithium resource projects within the United States, including developments in the Smackover brine formation spanning from Texas to Florida and around the Great Salt Lake in Utah.

The US Army recently signed a long-term lease agreement with the company, permitting the construction of a lithium refinery at the Red River Army Depot in Texas. This initiative is part of efforts by the Trump administration to strengthen the domestic critical minerals supply chain.