Rio Tinto Confirms Interest in Acquiring Arcadium Lithium Amid Falling Prices

October 7, 2024

Rio Tinto has expressed interest in acquiring Arcadium Lithium, positioning itself to become one of the largest lithium producers globally. The announcement comes at a time when global lithium prices have seen a sharp decline, largely due to economic challenges in China and a decrease in demand for electric vehicles (EVs).

In a statement issued today, Rio Tinto described the approach as non-binding, with no guarantee that a transaction will occur. Last week, Reuters reported that discussions between the two companies had taken place, with Arcadium potentially being valued between $4 billion and $6 billion.

Lithium prices have fallen by about 20% so far this year, which has contributed to Arcadium’s share price dropping by nearly 50%. Despite this, lithium remains a key mineral in the global shift towards renewable energy, especially for its role in EV battery production. Experts predict a significant surge in demand, with a forecasted increase of nearly 500% by 2050.

Arcadium, with assets in Argentina, Australia, Canada, and the US, presents a valuable opportunity for Rio Tinto, particularly as analysts anticipate a recovery in lithium prices, which could boost Arcadium's market position. Rio Tinto has stated that no further comments will be made unless there are new developments.

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