21st Dec 2021 17:27
(Alliance News) - Rio Tinto PLC on Tuesday said it has agreed to buy the Rincon lithium project in Argentina for USD825 million.
The miner said the deal to buy the large undeveloped lithium brine project underscores its commitment to build its battery materials business. The project is a long life, scaleable resource capable of producing battery grade lithium carbonate, Rio Tinto flagged.
"The market fundamentals for battery grade lithium carbonate are strong, with lithium demand forecast to grow 25-35% per annum over the next decade with a significant supply demand deficit expected from the second half of this decade," the FTSE 100 constituent said.
Once bought, Rincon will be subject to studies to confirm the resource, and work will be done to determine the development strategy and timing.
"This acquisition is strongly aligned with our strategy to prioritise growth capital in commodities that support decarbonisation and to continue to deliver attractive returns to shareholders," said Chief Executive Jakob Stausholm.
"The Rincon project holds the potential to deliver a significant new supply of battery-grade lithium carbonate, to capture the opportunity offered by the rising demand driven by the global energy transition," said Stausholm. "It is expected to be a long life, low-cost asset that will continue to build the strength of our Battery Materials portfolio, with our combined lithium assets spanning the US, Europe and South America."
The deal is expected to complete in the first half of 2022.
Shares in Rio closed up 3.4% at 4,921.98 pence in London on Tuesday.
By Lucy Heming; [email protected]
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