BUENOS AIRES – Rio Tinto (NYSE: RIO) is on the shortlist to partner Chilean state miner Codelco on a new lithium project, and has expanded production plans for the battery metal at its plant in Argentina, CEO Jakob Stausholm told Reuters on Thursday.
The South American moves are part of the global miner’s efforts to lock in its position as one of the world’s biggest miners of lithium, a metal needed for electric cars that can be found in large brine deposits in Chile and Argentina.
The plans follow Rio’s $6.7 billion takeover of Arcadium Lithium (NYSE: ALTM), which when complete would put Rio on track to become the world’s third-largest lithium miner behind leader Albemarle (NYSE: ALB) and Chile’s SQM.
Rio Tinto’s Argentina project, at the Rincon salt flat, now represents a $2.5 billion investment, Stausholm said, including plans to boost total capacity to 60,000 metric tons.
The expansion would see a main plant have a 57,000-ton capacity, up from a prior plan for 50,000 tons, due to finalized engineering work that showed the potential for higher output.
Construction is scheduled to begin in mid-2025, with initial production expected in 2028.
A 3,000-ton starter plant is already complete, with no further capital costs. It produced its first ton of lithium last week using direct lithium extraction (DLE), an innovative process meant to quicken production and reduce water use that numerous rivals are attempting to implement at a commercial scale.
Stausholm said he hoped the acquisition of Arcadium, expected to close in mid-2025, would help Rio Tinto (NYSE: RIO) improve its extraction technology. Arcadium operates two of Argentina’s main lithium mines, using a blend of DLE and traditional evaporation ponds.
Rio’s Argentina expansion plans come as lithium prices have plunged due to Chinese oversupply and a slowdown in electric vehicle (EV) sales.
Stausholm said the Rincon project’s capital costs per ton are relatively low, and that the company is betting on long-term lithium demand.
“What matters is what will the price be in 2030,” Stausholm said. “We are absolutely convinced that we will see significant yearly growth in lithium for the next 10 if not 15 years.”
Chile is the world’s no. 2 lithium producer, while Argentina ranks fourth. In Chile, Stausholm said Rio Tinto (NYSE: RIO) is on the shortlist to partner with giant copper miner Codelco at the Maricunga salt flat that it is looking to develop.
Codelco did not immediately respond to a request for comment. It is set to select a partner, who will get a 49% stake, early next year.
Maricunga is Chile’s most important lithium deposit after the Atacama salt flat where Albemarle and SQM operate, and represents Codelco’s first lithium project from scratch.
“We are watching that development closely,” Stausholm said.
