Rio Tinto Eyes Major Lithium Acquisition Amid Market Uncertainty

Arcadium Lithium

Global mining powerhouse Rio Tinto has confirmed its interest in acquiring the US-based Arcadium Lithium, a move that could potentially elevate the company to one of the top global lithium producers. On October 7, Rio Tinto released a statement clarifying that the approach is currently non-binding, and there is no certainty a deal will be reached. Arcadium Lithium, formed earlier this year from a merger between Allkem and Livent, also confirmed the overture.

A Strategic Move in the Face of Market Challenges

Arcadium has emerged as a significant player in the lithium market, projected to be the third-largest producer by 2027. In the first half of 2024, the firm sold 20,100 tons of lithium hydroxide and lithium carbonate, with expectations to ramp up production to 170,000 tons of lithium carbonate equivalent (LCE) by 2026. However, the company has faced setbacks due to the downturn in the lithium market, including halting operations at its Mt Cattlin mine in Western Australia. Despite these challenges, Arcadium's long-term expansion plans aim for a production capacity of 295,000 tons of LCE by 2028.

Rio Tinto’s strategic expansion into lithium aligns with its growing focus on battery metals. In 2023, Rio Tinto invested in Australian lithium projects, positioning itself as a key player in the burgeoning electric vehicle (EV) market. With a lithium carbonate processing plant in Argentina expected to come online later this year, the potential acquisition of Arcadium could solidify Rio Tinto’s place as a leading force in the global lithium supply chain.

Rio Tinto Argentina Lithium Incentives Expand Fenix Growth Plan

Rio Tinto Argentina Lithium

Rio Tinto Argentina lithium incentives have strengthened again after Argentina approved the company’s $530 million expansion of the Fenix lithium project under its large-investment incentive regime. The approval marks Rio Tinto’s second lithium project accepted under Rigi, reinforcing Argentina’s role in the group’s battery materials strategy.

The Fenix expansion is expected to add 9,500 t/yr of lithium carbonate equivalent production capacity. Once completed, total output from the project is expected to reach around 41,500 t/yr.

Rio Tinto Argentina lithium incentives also support the company’s broader target to produce 200,000 t/yr of lithium carbonate equivalent by 2028. Most of that output is expected to come from Argentina, where Rio Tinto significantly expanded its position through the acquisition of Arcadium Lithium assets.

Fenix Expansion Adds Capacity to a Long-Running Lithium Asset

The Fenix project has operated in Catamarca province since 1997 and currently has nameplate capacity of 32,000 t/yr. The approved expansion adds new production to an established asset, reducing some of the execution risk compared with a fully greenfield project.

Argentina’s economy minister Luis Caputo said the new build would add $165 million to Fenix’s annual revenue from lithium carbonate equivalent sales. This gives the expansion clear commercial weight at a time when lithium producers are prioritising scale, cost control, and project discipline.

The approval also follows Rio Tinto’s earlier Rigi acceptance for Rincon. That $2.7 billion project is designed for 60,000 t/yr of lithium output and is expected to become the company’s future flagship lithium operation in Argentina.

Rigi Gives Argentina a Stronger Lithium Investment Platform

Rigi has become a central part of Argentina’s strategy to attract large-scale mining investment. The regime grants exemptions from value-added and import-export taxes, offers legal protections, and guarantees 30 years of regulatory stability.

That stability is especially important in lithium, where projects require large capital commitments, long permitting timelines, and confidence in tax and export rules. For Rio Tinto, Rigi helped support the investment case for deeper exposure to Argentina’s lithium sector.

The company’s former chief executive Jakob Stausholm said Rigi was one of the main reasons behind his confidence in acquiring Arcadium Lithium’s Argentine assets. That shows how fiscal and legal stability can directly influence global mining capital allocation.

The Metalnomist Commentary

Argentina is using Rigi to convert lithium resource potential into project commitments from major global miners. Rio Tinto’s second approval shows that policy stability can become as important as geology when battery metal producers decide where to invest.

Arcadium Reports Decline in 2024 Lithium Sales and Pauses Galaxy Project Ahead of Rio Tinto Acquisition

Arcadium Lithium

Lower Realized Prices and Reduced Spodumene Output Weigh on Results as Company Prepares for Strategic Transition

Arcadium Lithium Sales Dip in 2024 Amid Softer Prices and Supply Constraints

Arcadium, the U.S.-based lithium producer formed from the Allkem–Livent merger, reported a decline in lithium product sales on a lithium carbonate equivalent (LCE) basis in 2024, along with a drop in average realized prices. The company posted net income of $131.7 million, down sharply from $330.1 million in 2023.

Arcadium sold 42,300 metric tonnes of lithium salts, including lithium hydroxide and carbonate, alongside 140,000 dry metric tonnes (dmt) of spodumene concentrate. Despite stronger lithium carbonate and hydroxide sales, total LCE volumes dipped slightly due to lower spodumene output at its Mt Cattlin mine in Australia.

Galaxy Project Paused Amid Market Weakness and Pending Rio Tinto Deal

The company has paused investment in its Galaxy spodumene project in Canada, originally planned to deliver 40,000t LCE capacity. This reflects both near-term market caution and strategic considerations as Rio Tinto advances its acquisition of Arcadium.

As a result of the pending acquisition, Arcadium will not provide 2025 guidance or hold an earnings call. The Rio Tinto deal signals ongoing consolidation in the global lithium sector as major miners seek to secure critical battery material supply.

Although 2024 volumes held relatively steady, the combination of lower prices and production adjustments significantly impacted earnings—highlighting the importance of cost discipline and portfolio optimization amid market fluctuations.

Arcadium Acquires Li-Metal's Lithium Metal Unit for $11 Million

In a strategic move to enhance its vertically integrated lithium operations, U.S.-based Arcadium Lithium has acquired the lithium metal business of Canada’s Li-Metal for $11 million, the company announced on Friday. The acquisition includes Li-Metal’s intellectual property pertaining to a novel process that utilizes lithium carbonate instead of lithium chloride as feedstock for lithium metal production, a method anticipated to significantly reduce costs and environmental impact.

As part of the deal, Arcadium will also gain control of Li-Metal’s physical assets, including a pilot manufacturing plant located in Ontario, Canada. This acquisition aligns with Arcadium’s ongoing efforts to optimize its supply chain, as the company currently produces lithium carbonate from brine pools in Argentina and manufactures lithium metal at its Bessemer City facility in North Carolina, utilizing lithium chloride from its Guemes site in Salta, Argentina.

The shift to using lithium carbonate is expected to be more environmentally sustainable, as the traditional method of producing lithium metal from lithium chloride can generate up to 5 metric tonnes of toxic chloride gas per 1 tonne of lithium metal produced, according to Li-Metal.

Lithium Energy Secures Approval for Solaroz Lithium Brine Project

Solaroz

Green Light for Development of Argentina’s Solaroz Lithium Concessions with CNGR's Partnership

Lithium Energy, an Australian battery minerals company, has successfully secured regulatory approval for its Solaroz lithium brine project in Argentina. This marks a crucial step forward in the company’s strategic plans, including advancing its sales agreement with China's leading battery materials producer, CNGR.

A Major Milestone for the Solaroz Project

The approval, granted through the Environmental Impact Assessment (EIA), allows Lithium Energy and CNGR to jointly explore and develop all of the Solaroz lithium brine concessions. CNGR will be responsible for funding local operations as well as future development phases. This collaboration sets the stage for the project’s growth, as it moves closer to fulfilling its potential to supply lithium for the growing electric vehicle (EV) and battery industries.

In April 2024, CNGR agreed to purchase 90% of the Solaroz project for $63 million, highlighting the importance of the deal for both parties. Lithium Energy shares the lithium rights in the Olaroz Salar basin with Arcadium Lithium, with the project subject to an acquisition by Rio Tinto and Lithium Argentina.

Advancing Lithium Production with Direct Lithium Extraction Technology

To maximize the value of the Solaroz project, Lithium Energy is also exploring innovative Direct Lithium Extraction (DLE) technology. The company has partnered with China’s Xi’an Lanshen, a specialty resin producer, to develop this technology. Lanshen will also build a battery-grade lithium plant onsite with a capacity of 3,000 metric tonnes per year of lithium carbonate. This move aligns with global trends to streamline lithium production and ensure the sustainability of the critical material needed for the EV sector.

With the approval in place and a solid partnership with CNGR, Lithium Energy is poised to contribute to the global lithium supply chain and meet the rising demand for battery materials.

Albemarle to Cut Workforce Amid Falling Lithium Prices

Albemarle

Albemarle, the world's largest lithium producer, announced plans to reduce its global workforce by 6-7% in response to falling lithium prices and a $1 billion loss in the third quarter of 2024. The move aims to enhance cost efficiency and stabilize operations amidst ongoing market volatility.

Cost-Cutting Measures and Market Impact

The workforce reduction is expected to save Albemarle $300-400 million annually through redundancies, streamlined management roles, increased productivity, and optimized manufacturing costs. These savings are in addition to $100 million of cost-saving measures already implemented earlier this year.

Albemarle also revealed plans to halve its investment spending for 2025, with allocations reduced to $800-900 million. Despite the challenges, the company reaffirmed its average lithium carbonate equivalent price forecast of $12-15/kg for 2024, assuming recent pricing trends persist.

Lithium Market Trends and Key Developments

The lithium market has faced a sustained price decline since November 2022, though occasional bullish news has provided brief reprieves:

• Increased EV Sales: The U.S. reported higher electric vehicle sales in the recent quarter, boosting demand for lithium.
• Production Cuts: Chinese producer CATL halted extraction at its Jiangxi mine, reducing monthly lithium carbonate output by 8%.
• Record Lithium Acquisition: Mining giant Rio Tinto agreed to acquire Arcadium Lithium for $6.7 billion, marking the largest deal in the lithium sector’s history.

Albemarle's strategy reflects broader market adaptations as producers adjust to fluctuating demand and price pressures. The company's proactive measures highlight its commitment to maintaining leadership in the lithium industry while navigating economic challenges.

Argentina Targets $30 Billion in Annual Critical Mineral Exports

Critical Mineral

Copper and lithium to anchor Argentina’s mining surge, as foreign investors drive upstream battery-grade expansion.

Argentina aims to export $30 billion worth of critical minerals annually within the next five to seven years, according to Vice Minister of Energy and Mining Daniel Gonzalez. Speaking at CERAWeek by S&P Global in Houston, Gonzalez said the forecast hinges on lithium and copper, the country’s two most strategic resources.

The projection reflects Argentina’s emergence as a global hub for lithium production, with foreign-backed projects advancing steadily. Gonzalez emphasized the diversity of investment sources, including China, France, the UK, and the United States.

Lithium Sector Expands with Global Backing

Argentina currently hosts six operational lithium projects. Notable investors include Ganfeng Lithium (China), Eramet (France), Rio Tinto (UK-Australia), and Arcadium Lithium (US), recently acquired by Rio Tinto.

“There are no restrictions on foreign ownership,” Gonzalez noted, signaling a business-friendly regulatory environment. Most projects use brine-based extraction and are vertically integrated up to the production of battery-grade lithium salts.

Processing Capacity Grows, But No Battery Manufacturing

While lithium conversion facilities are embedded in most projects, Gonzalez acknowledged Argentina still lacks domestic battery manufacturing.

“All of their projects go to battery grade… What we don’t have is battery manufacturing. I don’t think we will have, unfortunately,” he stated.

Still, Argentina’s battery-grade lithium output positions the country as a key upstream supplier to global energy storage and electric vehicle markets. With rising demand and favorable investor terms, the nation is poised to become a top-tier player in the critical minerals supply chain.

Australia Revises Lithium Export Earnings Forecast Amid Price Slump

Australia Lithium

The Office of the Chief Economist (OCE) of Australia has lowered its forecast for the country's lithium export earnings for 2024-26, citing weaker-than-expected spodumene prices. In its September Resources and Energy Quarterly (REQ) report, the OCE adjusted its forecast for lithium earnings to A$6.35bn for 2024-25 and A$8.2bn for 2025-26. This marks a significant drop from its June forecast of A$6.58bn and A$9.07bn, respectively.

Weaker Demand and Market Surplus

The revision is primarily due to declining spodumene prices, which have been impacted by lower-than-expected demand for lithium, particularly in the electric vehicle (EV) sector, where growth has slowed in 2024. This slowdown, combined with new lithium projects initiated by the high prices seen in 2022, has resulted in a market surplus. In June, OCE projected spodumene prices for 2024 and 2025 at $1,107/t and $1,227/t, but these have now been revised down to $1,056/t and $1,131/t, respectively.

Despite lower prices, Australia's lithium production is expected to increase. Spodumene production is projected to rise from 471,000 tons of lithium carbonate equivalent (LCE) in 2024-25 to 558,000 tons in 2025-26. OCE expects lithium prices to recover by late 2024 as market conditions stabilize, driven by production cuts and supply disruptions, notably from China's largest battery producer, CATL.

The current downturn has led to several production cuts or suspensions from major Australian lithium producers, including Mineral Resources, Arcadium, and Core Lithium. The outlook remains bleak, with industry experts warning that many operations may shutter if prices fail to recover soon.

MinRes Maintains Li Targets, Adjusts Output Amid Market Weakness

Mineral Resources (MinRes)

Mineral Resources (MinRes) remains on track to meet its 2025 financial year spodumene concentrate targets. However, the company is adjusting output to prioritize higher-purity production amid a softening lithium market.

Production Adjustments and Grade Prioritization

MinRes aims for 420,000-460,000t of spodumene concentrate shipments, down from 487,000t in 2024. First-half shipments reached 261,000t, but will decrease due to the Bald Hill plant's November shutdown. The company increased average concentrate grade at Mt Marion, while grades at Bald Hill and Wodgina fell. Revenue per tonne rose in Q4, driven by grade improvements, despite a year-on-year drop. MinRes targets higher grades to counter falling lithium prices.

Cost Management and Strategic Partnerships

Furthermore, operating costs at all MinRes lithium sites currently exceed 2025 guidance. The company will reduce costs by implementing rostering and mine plan changes at Mt Marion and Wodgina. MinRes is collaborating with Livium to commercialize lithium recovery technologies, aiming to boost productivity. MinRes is not alone in cutting spodumene production. Arcadium Lithium will place its Mount Cattlin mine on care and maintenance, potentially impacting market prices.