Rio Tinto is making significant strides in South America, expanding its lithium production plans in Argentina and positioning itself to potentially partner with Chilean state miner Codelco on a new lithium project.
Key Highlights:
Strategic Moves in Lithium:
Rio Tinto aims to solidify its status as one of the largest lithium miners globally, crucial for electric vehicle (EV) batteries. The company is focusing on large brine deposits in Chile and Argentina.
Acquisition of Arcadium Lithium:
The expansion follows Rio’s $6.7 billion acquisition of Arcadium Lithium, which will elevate Rio Tinto to the position of the world’s third-largest lithium producer, behind Albemarle and SQM.
Argentina Project Details:
At the Rincon salt flat in Argentina, Rio Tinto’s investment now totals $2.5 billion, with plans to increase production capacity to 60,000 metric tons.
The main plant’s capacity will rise from 50,000 tons to 57,000 tons due to successful engineering assessments. Construction is set to begin in mid-2025, with initial production expected by 2028.
A smaller 3,000-ton starter plant has already been completed and produced its first ton of lithium last week using direct lithium extraction (DLE) technology, which aims to enhance production efficiency and reduce water usage.
Long-Term Outlook:
CEO Jakob Stausholm expressed confidence in long-term lithium demand despite recent price drops due to oversupply from China and a slowdown in EV sales. He emphasized that Rio’s capital costs per ton are relatively low and projected significant yearly growth in lithium demand over the next decade.
Potential Partnership with Codelco:
In Chile, Rio Tinto is in the running to partner with Codelco on the Maricunga salt flat, which is Chile’s second-most important lithium deposit. Codelco is expected to select a partner for a 49% stake early next year. This project marks Codelco’s first lithium initiative from the ground up.
Market Context:
Chile ranks as the world’s second-largest lithium producer, while Argentina is fourth. The collaboration with Codelco could enhance Rio’s positioning in the competitive lithium market.