Rio Tinto Eyes Major Lithium Acquisition Amid Market Uncertainty

Arcadium Lithium

Global mining powerhouse Rio Tinto has confirmed its interest in acquiring the US-based Arcadium Lithium, a move that could potentially elevate the company to one of the top global lithium producers. On October 7, Rio Tinto released a statement clarifying that the approach is currently non-binding, and there is no certainty a deal will be reached. Arcadium Lithium, formed earlier this year from a merger between Allkem and Livent, also confirmed the overture.

A Strategic Move in the Face of Market Challenges

Arcadium has emerged as a significant player in the lithium market, projected to be the third-largest producer by 2027. In the first half of 2024, the firm sold 20,100 tons of lithium hydroxide and lithium carbonate, with expectations to ramp up production to 170,000 tons of lithium carbonate equivalent (LCE) by 2026. However, the company has faced setbacks due to the downturn in the lithium market, including halting operations at its Mt Cattlin mine in Western Australia. Despite these challenges, Arcadium's long-term expansion plans aim for a production capacity of 295,000 tons of LCE by 2028.

Rio Tinto’s strategic expansion into lithium aligns with its growing focus on battery metals. In 2023, Rio Tinto invested in Australian lithium projects, positioning itself as a key player in the burgeoning electric vehicle (EV) market. With a lithium carbonate processing plant in Argentina expected to come online later this year, the potential acquisition of Arcadium could solidify Rio Tinto’s place as a leading force in the global lithium supply chain.