Rio Tinto commits to buy Arcadium Lithium for $6.7 billion

Mining giant Rio Tinto has announced it will acquire Arcadium Lithium in a cash deal worth $6.7 billion.

Combined, Rio Tinto and Arcadium could become the third largest lithium miner globally by 2030 if their projects come to fruition, according to Benchmark’s Lithium Forecast.

The counter-cyclical deal comes as lithium prices have fallen by more than 60% over the last 12 months, according to Benchmark’s Lithium Price Assessment.

“Rio is making its move when lithium prices are relatively low,” said Cameron Perks, product director for lithium at Benchmark. “This shows confidence in long-term lithium demand, suggesting that Rio sees the current market conditions as an opportunity rather than a risk.”

Read Benchmark’s analysis from when the deal was first proposed here.

What are the benefits of the acquisition?

Arcadium is already a top player in the lithium industry through its Hombre Muerto brine project which uses direct lithium extraction in Argentina and through a sizable pipeline of projects in Canada, Argentina and China.

“Rio’s expertise in mining and its robust balance sheet will likely enable Arcadium to accelerate its hard-rock lithium projects and expansion plans, as well as its downstream plans in Europe, where Rio already has a presence and relationships with EV-related customers,” Perks said.

Why is Rio Tinto buying Arcadium now?

The current low lithium price environment makes Arcadium an attractive takeover target. Perks notes that buying Arcadium now is “certainly a lot cheaper than when lithium prices soared to $80,000 a tonne.”

“This also indicates that Rio Tinto believes prices may have bottomed out, and that this is a strategic entry point,” he added.

What is the structure of the deal?

The deal has already been unanimously approved by the boards of both Rio Tinto and Arcadium. It is expected to close in mid-2025 subject to a 75% approval from Arcadium’s shareholders.

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