Following media speculation, Rio Tinto has confirmed it is holding discussions to acquire Arcadium Lithium, a leading global lithium chemicals producer created via the merger of Allkem and Livent.
Over the weekend, it was reported the potential deal could be valued between $US4 billion and $US6 billion.
If successful, the acquisition would position Rio as the world’s third largest lithium supplier, only behind Albemarle and Sociedad Química y Minera de Chile S.A. (SQM).
“The approach is non-binding and there is no certainty that any transaction will be agreed to or will proceed,” Arcadium Lithium said. “Arcadium Lithium will not comment further unless and until there is news to share.
“Arcadium Lithium remains focused on executing its strategic vision and pathway to significant growth, as set forth in its recent Investor Day presentation.”
Rio Tinto echoed similar sentiments in its statement, saying it “will not make further comment until or unless an update is appropriate”.
The potential acquisition comes at an interesting time for the global lithium sector.
The critical mineral has been hit with faltering prices for quite some time, which was primarily caused by a supply surplus and an increase in lithium supplies from countries such as China.
The downturn has resulted in Arcadium’s shares decreasing by more than 50 per cent since January 2024, currently making it an attractive takeover target.
Rio and Arcadium have synchronicities that could elicit a transaction. Both companies operate in similar jurisdictions, including Argentina where Rio is developing its Rincon lithium project and Arcadium is operating its Salar Del Hombre Muerto, Olaroz, Sal de Vida and Cauchari lithium assets.
Rio would be able to leverage Arcadium’s multinational upstream lithium capabilities and downstream processing offerings.
Subscribe to Australian Mining and receive the latest news on product announcements, industry developments, commodities and more.
