Rio Tinto tipped to form new lithium unit following Arcadium acquisition
Rio Tinto is planning to create its own standalone lithium division once the acquisition of Arcadium Lithium (ALTM) has been completed, according to a Reuters report
Citing an internal company memo, the Reuters story suggests that the new business, Rio Tinto Lithium, will assume control of Rio’ Rincon project in Argentina, although not the Jadar lithium project in Serbia. CEO Jakob Stausholm reportedly told employees in the memo that the move is to ensure tighter focus on the successful integration of ALTM once the $6.7B acquisition has been completed.
The deal for the $2.5B Rincon project in Argentina is Rio’s largest in more than a decade. The report goes on to suggest that given the unfamiliarity with integrating an entire company, Rio plans to absorb Arcadium slowly, out of concern that forcefully integrating the lithium producer could prompt an exit of talent that could potentially affect the value of the deal. Arcadium CEO Paul Graves is expected to lead the lithium operations from New York.
The Reuters report also that both the size and careful nature of the takeover reflect how closely tied Stausholm and his leadership team believe lithium is to the company’s future and the high value they place on Arcadium’s engineers as part of the deal.