Summary
This article highlights Rio Tinto’s strategic plans to enhance its lithium business and its investments in lithium extraction technologies. The mining giant also talks about its stance on maintaining restrain from any high-value acquisitions for its lithium segment. Additionally, trends on the drop in lithium prices, investor outlook, and the company’s lithium projects worldwide are discussed.
Continued Commitment to Lithium
CEO Jakob Stausholm expresses that Rio Tinto, a leading iron ore producer globally, will avoid undertaking any significant acquisitions to expand its lithium business. Instead, it will focus on enhancing the lithium extraction technology to exploit this vital metal used in the production of EV batteries.
Stance of Other Mining Companies on Lithium
Interestingly, most large mining companies, such as BHP, refrain from investing in lithium despite its increasing demand in the development of EV batteries.
Lithium Price Trends
The recent dip in demand for EV has triggered a downfall in lithium prices, with a basket monitored by Benchmark Mineral Intelligence caving more than 80% in the past year. Consequently, numerous producers had to halt production or eliminate jobs.
Global Gathering of Mining Companies and Financiers
PDAC, one of the most prominent global assemblies of mining companies and financiers, will take place from Sunday to Wednesday.
Future of Battery Capacity and Lithium
Stausholm indicates that as the world will undeniably require more batteries, including stationary batteries and EVs, the need for lithium will increase accordingly.
Rio Tinto’s Rincon Lithium Project in Argentina
Rio Tinto has planned to develop a lithium-brine mine in Argentina, part of the Rincon project, where a battery-grade lithium carbonate plant is expected to produce 3,000 tonnes annually, starting from the end of 2024.
The World’s Largest Share of Salt Lake Lithium Resources
With the world’s maximum share of salt lake lithium resources, Argentina poses a significant potential in the lithium market.
Jadar Lithium Project in Serbia
Rio Tinto has also invested in the Jadar lithium project in Serbia. However, the project is currently under dispute after the Serbian Government withdrew the project license in 2022 due to environmental concerns.
Inflation and Cost Stabilization
In an earlier discussion at the PDAC conference, Stausholm mentioned that the inflation in Western nations is likely to stabilize this year, thus helping firms to control costs.
Strategic Investment Insights
Investors keen on the lithium market should be watchful of Rio Tinto’s strategic plans and the evolving global lithium market. The market presents both risks, with price fluctuations and regulatory disputes, and opportunities, given the rise in EV production and battery capacity. Strategic insights suggest diversifying investments within this space and considering potential benefits of exploring companies committed to enhancing lithium extraction technologies.
Source: https://www.nytimes.com/2023/03/20/business/lithium-prices-falling-electric-vehicles.html
