Rio Tinto is in discussions to acquire Arcadium, a major lithium producer.

With lithium prices having plummeted by over 50 per cent since January, analysts say it is an opportune moment for Rio Tinto to secure a significant position in the global lithium market.

While no financial details have been confirmed, reports say the deal could be worth around $6 billion, or up to $8 billion to satisfy Arcadium shareholders, as Blackwattle Investment Partners stated in a letter; “Any offers in the reported range would significantly undervalue the company”.

The acquisition is seen as a strategic play for Rio Tinto, particularly as demand for lithium-ion batteries is expected to surge later this decade due to the rise of electric vehicles (EVs). 

Arcadium’s customer base includes major automakers such as Tesla, Ford, BMW, and General Motors, positioning Rio to capitalise on long-term growth in the sector.

Arcadium has one of the most extensive lithium portfolios globally, with deposits in Argentina, Australia, Canada, and the United States. 

Its focus on lithium alone, rather than diversification into other materials like some of its competitors, makes it a particularly attractive target. 

The company’s direct lithium extraction (DLE) technology is also expected to be a key asset in Rio’s eyes, with the potential to revolutionise lithium production, significantly reducing the time and environmental impact associated with traditional extraction methods.

Rio Tinto is already a major player in the lithium industry, with its Rincon project in Argentina set to begin production by the end of the year. 

However, acquiring Arcadium would accelerate its ambition to become one of the largest global suppliers of lithium, alongside rivals such as Albemarle and SQM. 

Analysts at Canaccord suggest that a combined Rio Tinto-Arcadium entity could control 10 per cent of global lithium chemicals supply by 2030.

CareerSpot This email address is being protected from spambots. You need JavaScript enabled to view it.