In announcing its half-year results, Rio Tinto shed light on how its Rincon lithium project in Argentina is progressing.
Capital expenditure for the 3000-tonne lithium carbonate starter plant has increased from the initial $US140 million ($206.4 million) estimate to $US335 million ($493.8 million).
“In 2022, we took the decision to proceed quickly to accelerate market entry,” Rio Tinto chief financial officer Peter Cunningham said.
“Since then, further studies have led to an extended schedule (at Rincon). We added to scope, for example to drive column performance in our DLE (direct lithium extraction) technology and we added a waste storage facility.”
DLE technology extracts brine from underground and pumps it to a processing plant where a resin or adsorption material is used to extract the lithium. Spent brine is then reinjected back into aquifers underground.
This is seen as a more environmentally friendly process and has the potential to be more cost-effective than traditional lithium mining methods.
Despite the capital increase at Rincon, Cunningham said committing to a starter plant “was the right decision” for Rio Tinto.
“The learnings and design improvements will be carried over to the full-scale project,” he said. “Early works such as the airstrip and phase one construction camp are already complete – on time and on budget – and capital intensity for full-scale is in line with current brine projects in Argentina.
“It is slightly higher than some recent hard rock projects, but we would expect the investment in DLE to lead to lower opex (operational expenditure) and higher recoveries.”
Rio Tinto announced a 43 per cent drop in its half-year after-tax profits, with the 2022 first-half figure of $8.9 billion pulling back to $5.1 billion in the six months just gone.
The major miner was affected by lower prices across its iron ore, copper and aluminium businesses.
“First half demand was relatively soft and supply constraints eased, leading to materially lower prices year on year but a modest rebound from the lows of last year’s second half,” Cunningham said.
“The Platts 62 per cent iron ore index dropped 14 per cent, LME (London Metal Exchange) copper declined 10 per cent and LME aluminium was down 24 per cent compared with the first half of 2022.”
Rio Tinto declared an interim dividend of $US1.77 per share for the first half of 2023.
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