Rio Tinto in talks to buy lithium producer Arcadium
Though lithium prices have dropped 88% over the past two years, partly due to Chinese oversupply, its demand is expected to surge in this decade as production of lithium-ion batteries picks up pace.
Mining giant Rio Tinto is in talks to buy US lithium producer Arcadium Lithium, the two companies have confirmed, as mining companies look to secure essential minerals for the global energy transition.
If the transaction is agreed, Rio Tinto would become the world’s third-largest supplier of lithium. The ultralight metal used for EV batteries and power storage is essential as the world shifts to cleaner forms of energy.
Financial specifics have not been disclosed, with the two companies indicating there was no certainty that any agreement would go through.
Arcadium Lithium’s current market value is around USD 3.31 billion.
Though lithium prices have dropped 88% over the past two years, partly due to Chinese oversupply, its demand is expected to surge in this decade as production of lithium-ion batteries picks up pace.
If it buys Arcadium, Rio will get access to lithium mines and other facilities in Argentina, Australia, Canada and the US, along with a customer base that includes Tesla, General Motors and BMW, according to a Reuters report.
Arcadium projected a 25% spike in combined lithium hydroxide and lithium carbonate sales volumes for 2024’s second quarter compared to the same period last year. It also announced it was planning to ramp up production in Argentina.
Rio has been facing challenges in developing its Jadar lithium project in Serbia over environmental concerns. If it goes ahead, that project could become Europe’s biggest mine of the metal.
