Rio Tinto weighs options to become 'market leader' in direct lithium extraction

Rio Tinto Group is weighing options on how it can apply direct lithium extraction technology to grow its lithium production following its acquisition of Arcadium Lithium PLC.

Rio Tinto's friendly US$6.7 billion acquisition of Arcadium announced Oct. 9 will create an entity with the third-largest reserves and resources of lithium. The purchase was motivated partly by Rio Tinto's need for direct lithium extraction (DLE) technology that uses less water, which is a key concern in countries with abundant lithium reserves contained in brines.

"Together with Arcadium, our combined technological capabilities position us to become market leaders in DLE and lithium processing," Rio Tinto CEO Jakob Stausholm said in an Oct. 9 investor presentation in London about the takeover. Rio Tinto wants to create a "lithium hub" in Argentina, where Arcadium's assets are located near its own Rincon project.

Arcadium has experience applying DLE-type adsorption technology at Salar del Hombre Muerto in Argentina and is also investing in next-generation DLE technologies through ILiAd Technologies LLC that can recover high-purity lithium chloride from lithium-laden brine resources using only water and no chemicals. iLiAd's technology also offers fresh water usage savings of up to nine times compared to conventional extraction methods using salars.

Rio Tinto, however, also has a 30.8% stake in Monash University spinoff ElectraLith Pty Ltd., which is developing its own DLE and refining (DLE-R) technology in Australia that does not use chemicals nor water and runs entirely on renewable energy.

Charlie McGill, CEO of ElectraLith, said he is "very encouraged" by discussions with Rio Tinto on Oct. 10 regarding the commitment to trial and test ElectraLith's first DLE-R prototype at Rincon in 2026.

"I can't speak for Rio [Tinto], but I think their value gets better by using our technology versus Arcadium's because our cost per [metric ton] will invariably be less than what their existing DLE is from the acquisition standpoint," McGill told S&P Global Commodity Insights.

ElectraLith delivered proof of concept in August, producing battery-grade lithium hydroxide from a range of lithium sources including salar brines at Rincon, Mandrake Resources Ltd.'s geothermal oilfield brines in Utah and spodumene leach from an undisclosed resource owner in Australia — all without using any water or electricity.

"Arcadium is further advanced in their use of DLE. Ours is a membrane separation technology — fundamentally different than other DLE technologies — which removes water and chemicals so it is a much better process in terms of cost, efficiency and water usage, but it's about a year away from being ready for commercialization. That's the trade-off," McGill said.

Competition for DLE technology

Stausholm said DLE is "developing all the time, and it is actually the solution to provide the lithium that the world needs."

"Don't forget that it was really Arcadium that started [DLE] many, many years ago ... and [Rio Tinto is] the fast follower," Stausholm said. "We haven't explored it fully yet. There is the right technology, but there's also a tremendous technology development journey ahead of us."

Paul Graves, CEO of Arcadium Lithium. Source: Arcadium Lithium.

During the London presentation, Paul Graves, CEO of Arcadium Lithium, said deploying ILiAD technology in the future will use less energy, water and land while recovering a "significantly higher proportion of lithium than conventional technologies," which in turn supports customers' desire for the most responsibly sourced lithium possible.

Extracting lithium carbonate from brine takes up to 25 steps, making it "really important to have the know-how [about] how the entire process works and how the different DLEs interact with specific brines [and] specific environmental conditions," Graves said.

"The key to unlocking initial implementation of DLE tends to be that know-how plus infrastructure. But once you have unlocked it, it's incredibly quickly replicable," Graves said, adding that Arcadium under Rio Tinto's ownership can "invest more quickly in the infrastructure" and "makes a massive difference to the ability to bring resources on."

Bigger pool of brine resources

McGill is not worried about Rio Tinto, ElectraLith's major investor, acquiring Arcadium. In fact, the takeover also gives ElectraLith a bigger pool of resources to potentially use with its DLE-R technology. Brine assets make up about 69% of Arcadium's net asset value, according to an RBC Capital Markets note this month.

"ElectraLith is really pleased with this outcome [of the acquisition of Arcadium] because it actually provides us with a bigger lithium brine customer, if you will, through Rio Tinto to trial our DLE-R and other products and other resources," McGill said.

ElectraLith is also drawing interest from other major miners in a A$25 million Series A fundraising to be completed by the end of this month, McGill said. The startup is also actively testing actual real-world brines from Chile and the Smackover formation in Arkansas, where oil major Exxon Mobil Corp. wants to become a major DLE producer.