Rio Tinto acquires lithium producer Arcadium

The British-Australian mining group Rio Tinto is becoming one of the largest lithium producers in the world through a 6.7 billion US dollar takeover. This will thus supply one of the most important raw materials for electric car batteries on a large scale in future.

Rio Tinto is putting 6.7 billion US dollars on the table to take over the US company Arcadium Lithium, whose lithium is used in vehicles from BMW, Ford, GM, Tesla and Toyota. The purchase price is a whopping 90 per cent higher than Arcadium’s share price on 3 October, the day before the takeover plans were announced. It is worth mentioning at this point: Arcadium’s share price had previously halved in the wake of falling lithium prices – the 90 per cent premium therefore brings the purchase price back close to the previous share price.

With the takeover, Rio Tinto is increasing its presence in a “high-growth, attractive market at the right point in the cycle”, says CEO Jakob Stausholm, explaining the takeover plans. He adds: “Acquiring Arcadium Lithium is a significant step forward in Rio Tinto’s long-term strategy, creating a world-class lithium business alongside our leading aluminium and copper operations to supply materials needed for the energy transition. Arcadium Lithium is an outstanding business today and we will bring our scale, development capabilities and financial strength to realise the full potential of its Tier 1 portfolio.”

The acquisition gives Rio Tinto access to lithium mines, processing facilities and deposits in Argentina, Australia, Canada and the US. Arcadium’s current annual lithium production capacity for a range of products, including lithium hydroxide and lithium carbonate, is 75,000 tonnes of lithium carbonate equivalent and expansion plans are in place to more than double capacity by the end of 2028. The deal would also make Rio Tinto one of the largest producers of the coveted metal for electric vehicle batteries, alongside Albemarle and SQM.

Rio Tinto has hardly played a role in the lithium business to date, has only participated in a lithium project in Argentina and is planning to open Europe’s largest lithium mine in Serbia soon, despite numerous objections from local residents. To date, Rio Tinto has mainly mined iron ore, aluminium and copper. The deal, which has already been unanimously approved by the management boards of both companies, is expected to be finalised in mid-2025.

riotinto.com, arcadiumlithium.com (PDF), riotintoandarcadium.com