Rio Tinto commits extra US$2.5b to lithium expansion
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The news: Rio Tinto will invest USD2.5 billion ($3.92 billion) to expand its Rincon lithium project in Argentina and expand production capacity to 60,000 tonnes of battery-grade lithium annually by 2031, according to media reports.
The context: The investment comes just months after it agreed to acquire Arcadium Lithium for USD6.7 billion in October, which positioned Rio to become the third-largest global lithium miner, behind Albemarle and SQM.
CEO Jakob Stausholm was quoted by the FT saying the company’s move was a countercyclical long-term bet in the EV battery material, despite a 30% price drop this year caused by oversupply.
The miner remains the only Western major heavily investing in lithium, contrasting rivals like BHP. Concerns about global reliance on China, which produces two-thirds of battery-grade lithium, underscore the strategic importance of the project.
The numbers: The Rincon expansion will include a 57,000-tonne expansion plant and a 3,000-tonne starter plant, with construction starting in mid-2025 and production by 2028. That is up from Rincon’s earlier capacity of 53,000 tonnes.
Rio started lithium production at Rincon last week, but offtake agreements are still pending.
Reuters noted the miner had hoped its Jadar project in Serbia would supply much of Europe's lithium, but local opposition and permitting delays mean progress could take at least two more years.
What they said: "We are positioning ourselves to become one of the top lithium producers,” The Financial Times quoted Stausholm as saying.
“This investment, alongside our proposed Arcadium acquisition, ensures that lithium will become one of the key pillars of our commodity portfolio for decades to come.”
The sources: The Financial Times , Reuters
