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“Acquiring Arcadium Lithium is a significant step forward in Rio Tinto’s long-term strategy, creating a world-class lithium business alongside our leading aluminium and copper operations to supply materials neededed for the energy transition.”
Jakob Stausholm,
CEO,
Rio Tinto.
In a significant move to bolster its position in the rapidly growing lithium market, Rio Tinto has announced plans to create a dedicated lithium division following its $6.7 billion acquisition of Arcadium Lithium. This strategic acquisition, which is set to close by July 2025, underscores Rio Tinto’s commitment to becoming a key player in the electric vehicle (EV) supply chain, particularly as global demand for lithium continues to surge.
The new division, named Rio Tinto Lithium, will oversee the management of the $2.5 billion Rincon lithium project located in Argentina. This project is pivotal as it represents Rio Tinto’s first foray into lithium production through direct lithium extraction (DLE), a method designed to enhance production efficiency. Given Rio Tinto’s limited experience in integrating a complete company, the approach will be gradual, aiming to retain Arcadium’s talent and preserve the value of the acquisition, ensuring a smooth transition and operational continuity.
With this acquisition, Rio Tinto is poised to become the world’s third-largest lithium producer, strategically positioning the company within the EV market, where lithium is a critical component for battery production. The demand for lithium is expected to rise significantly, especially with initiatives like the U.S. Inflation Reduction Act driving EV projects. Arcadium brings valuable engineering expertise and a workforce of approximately 2,400 employees across nine countries, with a substantial portion of its revenue (84%) generated from Asia, the epicenter of lithium demand. This expertise is expected to enhance Rio Tinto’s operational capabilities in the lithium sector.
Notably, the Jadar lithium project in Serbia will not be included in the new division, reflecting Rio Tinto’s intent to maintain a focused approach during the integration process, allowing for a more streamlined operation.
Additionally, Rio Tinto’s acquisition of Arcadium and the establishment of a lithium division signal a transformative shift in the company’s operational focus. As the demand for low-carbon minerals intensifies, Rio Tinto is evolving from its traditional roles in iron ore and copper production to become a significant player in the high-end minerals market essential for the energy transition. The company’s ongoing efforts to expand lithium production at Rincon, coupled with potential partnerships, position it well for future growth in this dynamic sector.
Jakob Stausholm, CEO of Rio Tinto, emphasized the importance of this acquisition, stating, “Acquiring Arcadium Lithium is a significant step forward in Rio Tinto’s long-term strategy, creating a world-class lithium business alongside our leading aluminium and copper operations to supply materials neededed for the energy transition.”
In conclusion, Rio Tinto’s strategic acquisition of Arcadium Lithium and the subsequent establishment of a dedicated lithium unit not only enhance its market position but also reflect a broader commitment to sustainable mining practices and the energy transition. As the global demand for lithium continues to rise, Rio Tinto is well-positioned to capitalize on this trend, ensuring its relevance in the evolving landscape of the mining industry.