LONDON - Mining giant Rio Tinto (NYSE:RIO) PLC announced on Thursday a $2.5 billion investment to expand its Rincon lithium project in Argentina, aiming to increase its annual production capacity to 60,000 tonnes of battery-grade lithium carbonate. This move marks the company's first large-scale commercial lithium venture and reflects its strategy to strengthen its position in the battery materials market.
The Rincon project, situated in the lithium-rich region of Salta province, will consist of a 3,000-tonne starter plant and a 57,000-tonne expansion plant. The project is expected to extend over 40 years, with construction of the expansion slated to start in mid-2025, pending necessary permits. Initial production is anticipated in 2028, with a gradual ramp-up to full capacity over the following three years.
Rio Tinto's Chief Executive Jakob Stausholm highlighted the project's alignment with the global energy transition and the company's commitment to environmental, social, and governance (ESG) standards. The project will employ direct lithium extraction technology, which is designed to conserve water, reduce waste, and yield a more consistent product compared to traditional methods.
The investment in Rincon aligns with Argentina's economic policies and the recently introduced Incentive Regime for Large Investments (RIGI), which offers benefits to investors such as reduced tax rates and regulatory stability for 30 years.
The expansion will leverage advanced technology to halve water usage in processing and aims to position Rio Tinto as one of the leading lithium producers worldwide. The Rincon project's ore reserves are reported to be 60% higher than initial estimates, and it is expected to be among the lowest-cost producers in the industry.
This strategic investment is part of Rio Tinto's broader efforts to diversify its commodity portfolio, with lithium poised to become a central component in the coming decades. The company also mentioned its proposed acquisition of Arcadium, further indicating its commitment to the lithium sector.
The information in this article is based on a press release statement from Rio Tinto.
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