Rio Tinto expands lithium assets with $825 mil Argentinian purchase

Rio Tinto has agreed to buy the Rincon lithium project in Argentina for $825 million, the mining company said Dec. 21, as it builds on its battery materials business while aligning its portfolio with clean energy goals.

The company will purchase the Salar del Rincon Project from Rincon Mining, owned by funds managed by private-equity group Sentient Equity Partners. The deal is expected to close in the first half of 2022.

Rincon is a large undeveloped lithium brine project in the heart of the lithium triangle in the Salta Province of Argentina, an emerging hub for greenfield projects. It can make battery grade lithium carbonate with a low carbon footprint at reduced costs.

The project is not operating commercially yet. A pilot plant currently running at the Salta Province site has shown that the direct lithium extraction technology proposed for the project has the potential to increase lithium recoveries, compared with existing alternative technologies, according to Rio Tinto.

"This acquisition is aligned with our strategy to prioritise ... commodities that support decarbonisation," Rio Tinto's CEO Executive Jakob Stausholm said in a statement.

The project has the potential to deliver a significant supply of battery-grade lithium carbonate and benefit from the rising demand driven by an energy transition, Stausholm said. Rio Tinto already owns lithium assets in the US, Europe, and South America.

Lithium demand is forecast to grow 25%-35%/year over the next decade, according to Rio Tinto. The company expects battery-grade lithium carbonate demand to exceed supply starting 2025.

The project's development and timing will depend on the completion of certain studies, Rio Tinto said.