Rio Tinto sees lithium as fastest-growing division
Rio Tinto expects its lithium business to grow faster than its copper, iron ore and other divisions as it seeks to triple production by 2028 for the electric vehicle and battery storage markets, an executive said.
The world’s second-largest mining company jumped into the lithium sector last year with the acquisition of US-based Arcadium, which gives it access to mines, processing facilities and deposits on four continents, as well as a customer base that includes Tesla.
The British-Australian company is integrating these assets amid a lithium price crash caused in part by oversupply in China; It’s a market malaise that caused a wave of layoffs across the industry and has only begun to abate in recent months.
Rio is working to open mines in Argentina and Canada that he believes could still be economical if prices fall, Jérôme Pécresse, head of the company’s aluminum and lithium business unit, told Reuters on the sidelines of the Fastmarkets Global Lithium, Battery and Critical Materials Conference in Las Vegas.
The company plans to produce at least 61,000 metric tons of lithium this year and have a production capacity of 200,000 metric tons by 2028 if the market demands it.
“We want to show that we can make progress on time and on budget,” Pécresse said.
He emphasized that Rio aims to bring online-only low-cost assets to supply clients, many of whom want long-term contracts with price floors and ceilings to protect both miners and buyers.
Still, he acknowledged that the lithium market “is in a growth phase compared to other major global commodities”; This is a fact confirmed by lithium’s rapid transformation from a niche material to an economic building block in high demand.
“This is a market that is sort of trying to find itself,” he said.
Pécresse, who sits on Rio’s board of directors, declined to comment on possible merger requests between Rio and Glencore, citing a six-month standstill regulation that expires in August.
Much of Rio’s growth will come from the company’s investment in direct lithium extraction, which was the primary reason for the Arcadium acquisition.
Pécresse said he expects one of Rio’s DLE projects to be launched within a few years.
He added that Rio is not currently considering purchasing other lithium projects.
Stating that he personally uses a hybrid vehicle, Pécresse said, “We are very pleased with Arcadium assets.” “We have a clear roadmap to reach 200,000 (metric tonnes per year of production) by 2028.”
While the Arcadium acquisition and that growth could make Rio one of the world’s largest battery metal producers, Pécresse said that’s not his goal. Albemarle is the world’s largest manufacturer.
“We don’t have a strategy to be number one or number three,” he said. “Our strategy is to have a set of assets large enough to enable us to connect with customers.”
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