Rio Tinto further confirms its “lithium” strategy with a new investment of $2.5 billion in Argentina. The mining giant is betting on a rebound in metal prices which are currently very low, due to demand from the electric battery sector which is slipping.
Lithium prices have fallen by 30% this year, but Rio Tinto continues to invest more and more in this key metal for electric car batteries, ignoring the setbacks of other miners.
One after the other, companies see their value fall. In the third quarter of 2024, Albemarle, the largest lithium producer, announced a loss of more than $1 billion. The American number 1 had to reduce its costs and suspend its project to build a lithium refinery in South Carolina. Before him, several Chinese miners had suffered significant lossesin the first semester.
Demand from the automotive sector, a key price factor
But despite these economic difficulties, Rio Tinto knows that the future will be bright, because as soon as demand from the automotive sector picks up, “ lithium prices will be settled », summarizes Michel Jebrak, specialist in mineral resources and co-author of the book Objectif lithium (Editions MultiMondes).
In the meantime Rio Tinto, which is reaping profits thanks to the current prices of copper and gold, is taking advantage of the low cycle in lithium prices and a period favorable to negotiations: two months ago, the group bought the American Arcadium for $6.7 billion, an acquisition in addition to that of the Rincon project, in 2022, for $825 million in Argentina.
The energy transition
It is this site which will benefit from a new investment of more than two billion dollars to expand the group’s first commercial-scale lithium production. Objective: finance a new processing plant to achieve production of 60,000 tonnes per year of lithium, of the quality necessary for batteries, by 2031.
Rio Tinto’s desire is clearly stated: to become one of the main producers of lithium in the world. With the addition of scandium and aluminum, all the metals of a wind turbine are now part of the group’s portfolio, summarizes Michel Jebrak. A bet on the future there too.
