It’s fair to say that lithium had a tough 2024.
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.
It was the lower lithium price that made Rio Tinto go all in on lithium. The biggest move the company made was acquiring Arcadium Lithium for $US6.7 billion ($10.78 billion).
First announced in October 2024, the transaction will see Rio acquire Arcadium in an all-cash transaction for $US5.85 ($9.41) per share, representing a 90 per cent premium on Arcadium’s October 4 2024 closing price of $US3.08 ($4.95) per share.
The deal has now received all requisite shareholder approvals, with the deal on track to be finalised by mid-2025.
With the necessary shareholder approvals locked in right before Christmas in 2024, the acquisition also saw merger control clearance be satisfied or waived in Australia, Canada, China, the UK and the US, with investment screening approval having been been satisfied in the UK as well.
“(The) vote of support (on December 23 2024) by our shareholders confirms our shared belief that with Rio Tinto, we will be a stronger global leader in lithium chemicals production,” Arcadium chief executive officer Paul Graves said.
“Together, we enhance our capabilities to successfully develop and operate our assets while supporting the clean energy transition. We are confident that this transaction will provide future benefit to our customers, employees and the communities in which we operate, and I am excited by the path ahead.”
The deal had synchronicities that elicited the transaction. Both companies operate in similar jurisdictions, including Argentina where Rio Tinto is developing its Rincon lithium project and Arcadium is operating its Salar Del Hombre Muerto, Olaroz, Sal de Vida and Cauchari lithium assets.
Rio will also be able to leverage Arcadium’s multinational upstream lithium capabilities and downstream processing offerings.
If implemented, 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).
Rio also approved a $2.5 billion expansion of the Rincon project in Argentina before the end of 2024.
Rincon is the company’s first commercial scale lithium operation. Its capacity of 60,000 tonnes (t) of battery grade lithium carbonate per year is comprised of the 3000t starter plant and 57,000t expansion plant.
Rincon has an expected mine life of 40 years, with construction of the expanded plant scheduled to begin in mid-2025, subject to permitting.
First production is expected in 2028 followed by a three-year ramp up to full capacity, generating significant job creation and economic opportunities for local businesses.
With a major M&A close to finalisation and a multi-billion-dollar project expansion in the works, Rio will make 2025 its year of lithium.
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