Rio Tinto CEO Jakob Stausholm expressed optimism regarding the continued growth of the key battery mineral lithium, driven by the increasing adoption of electric vehicles. However, he highlighted expectations for price volatility in the lithium market.
Despite the positive outlook on lithium, Stausholm conveyed that Rio Tinto will refrain from pursuing major acquisitions to expand its lithium business. Instead, the company intends to focus on enhancing lithium extraction technology as part of its strategic approach.
While some mining giants like BHP have chosen not to invest in lithium, Rio Tinto, the world’s largest iron ore producer, remains committed to its lithium ventures.
The softening demand for electric vehicles has led to a decline in lithium prices, with a Benchmark Mineral Intelligence-tracked basket plummeting over 80% in the past year. This market trend has prompted numerous producers to halt production and implement job cuts.
Stausholm emphasized the company’s consistent view on the volatility of battery material prices, recognizing the necessity for increased battery capacity not only for electric vehicles but also for stationary applications. This heightened demand for batteries is expected to drive the need for more lithium.
Rio Tinto’s initiatives include the development of the Rincon project, a lithium-brine mine in Argentina, where plans are underway to establish a battery-grade lithium carbonate plant with an annual capacity of 3,000 tonnes. Production at this site is slated to commence by the end of 2024.
Argentina boasts the world’s largest share of salt lake lithium resources, positioning it as a key player in the global lithium market.
Additionally, Rio Tinto holds ownership of the Jadar lithium project in Serbia, which has encountered challenges following Serbia’s revocation of the project license in 2022 due to environmental concerns.
At the annual Prospectors and Developers Association of Canada (PDAC) conference in Toronto, Stausholm addressed the audience and shared insights on the outlook for inflation in Western countries, predicting a moderation that could aid companies in stabilizing costs.
The PDAC conference, spanning from Sunday to Wednesday, serves as a prominent gathering for mining companies and financiers worldwide.