Rio Tinto Expands Lithium Assets with Arcadium and Chile Deals

About Rio Tinto Ltd

Rio Tinto Ltd (ASX: RIO) is one of the world’s largest and most diversified mining and metals companies, with a global footprint spanning six continents. Headquartered in London and dual-listed in Australia and the UK, Rio Tinto specialises in the exploration, development, production, and processing of a broad range of commodities including iron ore, aluminium, copper, and industrial minerals. The company’s integrated operations combine world-class mining assets with advanced logistics, processing, and port infrastructure, enabling efficient and scalable resource delivery to global markets. In Australia, Rio Tinto is a dominant force in the Pilbara region of Western Australia, where it operates a world-leading iron ore business supported by a proprietary rail and port network. It is also a major aluminium producer with integrated bauxite mining, alumina refining, and smelting operations. Globally, Rio Tinto is recognised for its innovation in automation, safety, and sustainable mining practices, including its leadership in low-carbon aluminium production and its investment in renewable energy solutions.

Strategic Expansion: Arcadium Acquisition and Maricunga Deal

As global decarbonisation efforts accelerate, Rio Tinto, the world’s second-largest mining company, is rapidly diversifying beyond iron ore with aggressive expansion into lithium. With a $6.7 billion acquisition of Arcadium Lithium and a landmark joint venture in Chile’s Maricunga project, Rio Tinto is positioning itself as a major player in the global supply of battery-grade lithium, a critical mineral for electric vehicles (EVs) and the broader energy transition.

Rio Tinto recently completed the acquisition of Arcadium Lithium plc (formerly listed as ALTM on the NYSE and LTM on the ASX), a deal sanctioned by the Royal Court of Jersey and fully executed in March 2025. The $6.7 billion all-cash transaction, funded via a bridge loan facility expected to be refinanced with long-term debt, significantly expands Rio’s lithium portfolio. Arcadium’s assets, including the Tier 1 Rincon lithium brine project in Argentina, now fall under the newly formed division “Rio Tinto Lithium.”

The acquisition positions Rio Tinto among the top global lithium producers. The company aims to scale production to more than 200,000 tonnes of lithium carbonate equivalent (LCE) annually by 2028. According to internal projections and market data, this capacity could generate substantial EBITDA uplift in a market projected by Benchmark Mineral Intelligence to triple in demand by 2030, as EV adoption surges globally.

Complementing this acquisition, Rio Tinto announced it will invest up to US$900 million in Chile’s Maricunga lithium project, in partnership with state-owned miner Codelco. This move gives Rio a 49.99% stake in one of the highest-grade, undeveloped lithium brine assets globally. Chile, previously the world’s largest lithium producer until 2017, remains part of the so-called “Lithium Triangle” (Chile, Argentina, and Bolivia), which holds over 50% of the world’s known lithium reserves.

The partnership with Codelco not only grants Rio access to critical resources but also aligns with Chile’s national strategy to maintain sovereign oversight of its lithium assets while inviting global expertise and capital. This joint venture accelerates the country’s strategic objective to reclaim leadership as the world’s top lithium producer, while allowing Codelco to diversify its portfolio.

Operational Synergies and ESG Considerations

Rio Tinto has signalled plans to integrate operations in northern Chile with its nearby copper exploration project, Nuevo Cobre, in an effort to optimise infrastructure use and minimise environmental impact, especially water usage, a critical issue for lithium brine operations. CEO Jakob Stausholm emphasised this strategy during the acquisition announcement, saying the company is committed to “bringing significant investment” to the region while maintaining ESG best practices.

The company’s pivot into lithium complements its broader portfolio, which includes leading positions in copper, aluminium, and iron ore. These materials are central to the global electrification and renewable energy buildout. However, Rio’s past controversies, including the destruction of the Juukan Gorge sacred site in 2020, place added scrutiny on its social licence to operate, especially in jurisdictions with state-owned partners.

In contrast to some of its peers, Rio has explicitly labelled lithium a core growth focus. BHP Group (ASX: BHP), for instance, has largely stayed on the sidelines of lithium, favouring other transition metals like nickel and copper. Rio’s differentiation here could provide long-term strategic advantage, particularly if lithium prices rebound from recent 2023–2024 lows driven by oversupply and slower-than-expected EV sales in China.

Investor Outlook and Market Implications

While lithium spot prices fell over 70% in 2023, they have shown early signs of stabilisation in 2025. Benchmark Mineral Intelligence forecasts that lithium demand will outstrip supply again by 2026, due to accelerating EV penetration and grid-scale battery deployment. This creates a favourable medium-term backdrop for Rio’s lithium portfolio.

Rio Tinto’s shares have remained relatively stable year-to-date, supported by strong iron ore revenues, though investors are watching for clarity on capital expenditure and returns from the lithium division. The Arcadium deal, while large, is viewed as value-accretive over the medium term, especially given Rio’s track record in large-scale resource development and its low gearing ratio of 15% (as of FY24).

The key risk remains execution, developing brine and hard rock lithium assets across politically sensitive jurisdictions and ensuring timely production ramp-up. Moreover, Rio will need to navigate evolving regulatory environments, particularly in Chile, where recent reforms have introduced greater state involvement in resource extraction.

Still, the company appears well-positioned. With strategic assets across the Lithium Triangle and Australia, experienced project development capabilities, and rising ESG standards, Rio Tinto is emerging as a global leader in lithium. Its expansion signals a bold pivot toward energy transition materials, one that could reshape its earnings profile in the coming decade.