TLDR
- Rio Tinto has acquired Arcadium Lithium for $6.7-8.6 billion, positioning itself as a major lithium producer
- The company aims to grow lithium production capacity to over 200,000 tons by 2028
- The newly formed Rio Tinto Lithium division will incorporate Arcadium’s assets alongside Rio’s existing Rincon project
- Arcadium Lithium reported revenues of approximately $1 billion in 2024
- This acquisition places Rio Tinto among top lithium producers like Albemarle and Sociedad Quimica y Minera
Rio Tinto has completed its acquisition of Arcadium Lithium, creating a major new player in the global lithium market. The deal received approval from the Royal Court of Jersey on March 5, 2025.
The transaction has been reported with slightly different values in various sources. One report places the deal at $6.7 billion while another states $8.6 billion.
This strategic move positions Rio Tinto as one of the world’s largest lithium producers. The company now controls one of the largest lithium resource bases globally.
Rio Tinto Lithium is the name of the newly formed division. It will incorporate Arcadium’s existing assets alongside Rio Tinto’s Rincon lithium project.
The mining giant has set ambitious growth targets for its lithium business. Rio aims to expand capacity to more than 200,000 tons of lithium carbonate equivalent per year by 2028.
Arcadium Lithium brings valuable capabilities to Rio Tinto. The company produces lithium hydroxide, a key component used in various applications including lithium greases, dyes, resins, and “green” tires.
Arcadium reported solid financial performance before the acquisition. In 2024, the company generated approximately $1 billion in revenue with earnings per share of $0.14.
Arcadium has existing expansion plans that Rio Tinto will likely accelerate. These include a first wave of four projects expected to be completed by 2028 and a second wave to follow.
The company projects strong growth
The company projects strong growth in the coming years. Arcadium’s revenues were expected to grow at a 24% compound annual growth rate to reach $2.7 billion by 2028.
Lithium prices have declined 31% over the past year due to an oversupplied market. However, demand is expected to increase with growing adoption of electric vehicles and renewable energy systems.
Rio Tinto has been building its lithium portfolio to capitalize on future demand. The company acquired the Rincon lithium project in Argentina in 2022 and announced a $2.5 billion investment in the project in December 2024.
The Rincon project has impressive capabilities. It can produce 60,000 tons of battery-grade lithium carbonate yearly and has an expected mine life of around 40 years.
Rio Tinto also owns the Jadar project in Serbia. This project was temporarily on hold due to environmental protests, but Serbia’s top court lifted the ban in July 2024.
Jakob Stausholm, Rio Tinto’s CEO, highlighted the strategic importance of the merger. He emphasized how it combines Rio Tinto’s financial strength with Arcadium’s technical capabilities.
The deal was structured as an all-cash transaction. Rio Tinto valued Arcadium Lithium shares at $7.55 each and plans to finance the acquisition through a bridge loan facility initially.
Higher EBITDA and operating cash flow projected
Rio Tinto expects significant financial benefits from the acquisition. The company projects higher EBITDA and operating cash flow in coming years, supported by volume growth.
The acquisition places Rio Tinto in elite company within the lithium sector. It joins other major producers like Albemarle, which has a market cap of about $8.7 billion, and Sociedad Quimica y Minera, valued at $11.41 billion.
Following the completed transaction, Arcadium Lithium’s shares will be delisted. This affects both the New York Stock Exchange and Australian Securities Exchange listings.
Rio Tinto has also emphasized its commitment to responsible mining practices throughout this expansion. The company highlights its focus on respecting local communities and minimizing environmental impacts.
The acquisition aligns with global energy transition trends. As demand for battery materials continues to grow, Rio Tinto is now well-positioned to be a key supplier in this evolving market.
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