While BHP has little interest in lithium, Rio Tinto is eager to increase its exposure to the battery metal.
The major miner had a win earlier this year by purchasing the Rincon lithium project in Argentina, while it also produces lithium from waste rock at its Boron project in California.
Conversely, Rio Tinto’s Jadar lithium project in Serbia has failed to get off the ground after being blocked by the Serbian Government in January 2022 amid protests from green groups.
As recently as this week, Serbian Prime Minister Ana Brnabić told reporters that there would be no possibility of reviving the Jadar project. Despite this, Brnabić said she held regrets regarding Jadar, given the commercial opportunities that would derive from the project.
Brnabić said she would be open to exploring other lithium opportunities if they did arise.
Rio Tinto still holds hope that Jadar will materialise, highlighting that it was ‘construction ready’ in a recent presentation.
The presentation showcased Rio’s Bundoora research and development (R&D) facility, where the company has a Jadar pilot plant to simulate the mine’s processing methods.
Rio Tinto has aspirations to develop a leading battery materials business by 2030, which will be focused on lithium and “potentially nickel”. A core focus for Rio is to “grow the business”.
Growth could be leveraged through organic streams, such as the advancement of the Rincon project, or through mergers and acquisitions (M&As).
Rio said potential partners would need to be well positioned on the cost curve and have a low-carbon footprint.
Given the frustrations surrounding the stalled Jadar project, and the undeniable lithium market fundamentals, Rio’s battery metals fervour is not misguided.
But the major hasn’t always had the best conversion rate, something not just limited to its Jadar exploits but also the full acquisition of the Oyu Tolgoi copper mine in Mongolia.
Rio first launched its bid for a full stake in Turquoise Hill Resources in March and it was only on Friday December 9 that it received the required support from Turquoise Hill shareholders. This came after months of back and forth between the companies.
So when can we expect Rio’s next M&A bid?