$6.7 Billion to $8.6 Billion Deal Elevates Rio Tinto Among Lithium Giants
Rio Tinto has officially completed its acquisition of Arcadium Lithium, solidifying its position as a major force in the global lithium market. The deal, which received approval from the Royal Court of Jersey on March 5, 2025, is valued between $6.7 billion and $8.6 billion, depending on varying reports.
The acquisition marks a pivotal moment for Rio Tinto, as it integrates Arcadium’s high-value lithium assets into its portfolio. The newly formed Rio Tinto Lithium division will incorporate Arcadium’s lithium production facilities alongside Rio’s existing Rincon project in Argentina. With this strategic move, Rio Tinto now controls one of the largest lithium resource bases in the world, putting it in direct competition with top producers like Albemarle and Sociedad Quimica y Minera.
Aiming for 200,000 Tons of Lithium Production by 2028
Rio Tinto has set ambitious expansion targets for its lithium business. By 2028, the company aims to ramp up production to over 200,000 tons of lithium carbonate equivalent per year, positioning itself as a leading supplier for the rapidly growing electric vehicle (EV) and renewable energy markets.
Arcadium Lithium, which reported $1 billion in revenue in 2024, brings valuable capabilities in producing lithium hydroxide, a crucial component in applications ranging from EV batteries to industrial greases and resins. The company had already laid out aggressive expansion plans, with a projected 24% compound annual growth rate (CAGR) expected to push revenues to $2.7 billion by 2028. Rio Tinto is expected to accelerate these expansion efforts, ensuring a steady supply of lithium for global demand.
Strengthening Rio Tinto’s Lithium Portfolio
This acquisition follows Rio Tinto’s increasing investments in lithium production. The company previously acquired the Rincon lithium project in Argentina in 2022 and committed $2.5 billion to its development in December 2024. The Rincon facility boasts an annual production capacity of 60,000 tons of battery-grade lithium carbonate and an estimated mine life of 40 years.
Rio Tinto also owns the Jadar lithium project in Serbia, which faced delays due to environmental protests. However, Serbia’s top court lifted the ban in July 2024, allowing the project to move forward, adding another significant lithium resource to Rio Tinto’s portfolio.
Financial Impact and Market Positioning
Rio Tinto expects the Arcadium Lithium acquisition to drive higher EBITDA and operating cash flow, supported by increasing production volumes. The deal was structured as an all-cash transaction, with Rio Tinto valuing Arcadium’s shares at $7.55 each and financing the purchase through a bridge loan facility.
The acquisition elevates Rio Tinto into the upper echelon of lithium producers. The company now joins industry leaders like Albemarle (market cap: $8.7 billion) and Sociedad Quimica y Minera (market cap: $11.41 billion), reinforcing its influence in the rapidly evolving lithium sector.
Strategic Growth in the Lithium Market
Despite a 31% decline in lithium prices over the past year due to market oversupply, long-term demand remains strong. The adoption of electric vehicles and renewable energy systems is projected to drive a significant increase in lithium consumption, positioning Rio Tinto for substantial future gains.
Rio Tinto’s CEO, Jakob Stausholm, highlighted the strategic importance of the acquisition, emphasizing how it combines Rio Tinto’s financial strength with Arcadium’s technical expertise to create a dominant force in lithium production.
As Arcadium Lithium’s shares prepare to be delisted from the New York Stock Exchange and Australian Securities Exchange, Rio Tinto has reiterated its commitment to responsible mining practices. The company has pledged to prioritize environmental sustainability and community engagement as it expands its lithium production capabilities.
With this acquisition, Rio Tinto has firmly positioned itself as a global leader in lithium, ready to capitalize on the surging demand for battery materials in the coming years.
