Rio Tinto’s recent acquisition of Arcadium for $6.7 billion marks a significant move in the lithium extraction landscape, positioning the mining giant to leverage innovative filtration technologies crucial for the electronics and electric vehicle (EV) sectors.
Analysts emphasize that Arcadium’s expertise in direct lithium extraction (DLE) is the key asset for Rio Tinto, propelling it into competition with industry players like Eramet, Sunresin, and Exxon Mobil. The DLE market is projected to surpass $10 billion in annual revenue within the next decade, as it offers a faster, more efficient method for lithium production, supplying the growing demand for EV batteries within days rather than months, as is typical with traditional evaporation ponds and open-pit mining methods.
DLE technologies, which resemble common household water softeners, aim to extract upwards of 90% of lithium from brines—significantly more effective than the 50% extraction rate achieved through conventional pond methods. Although no company has successfully launched a commercial DLE operation without incorporating evaporation ponds, the race is on for various firms to be the first to do so.
Arcadium has a historical advantage; its predecessor company pioneered early DLE technology in the 1990s at a lithium brine site in Argentina that continues to operate today. While this site still utilizes ponds, Arcadium’s extensive experience with DLE makes it an attractive target for Rio Tinto, especially as Chilean officials push for DLE adoption while phasing out pond usage.
Rio Tinto CEO Jakob Stausholm expressed confidence in DLE as a solution to meet global lithium demands. He announced the acquisition as a cash deal valuing Arcadium at a 90% premium compared to its share price prior to the acquisition news.
Notably, Arcadium’s DLE operations in Argentina are situated near a project that Rio acquired for $825 million in 2022, although that venture has yet to yield lithium. Stausholm revealed that Arcadium’s engineers have already begun discussions with Rio’s DLE team, indicating a promising collaboration ahead.
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