Global demand for lithium continues to grow in step with the adoption of electric vehicles (EVs) and the need for energy storage systems. Rio is looking to position itself as a next-generation supplier through direct lithium extraction, Fastmarkets learned in the week ended Friday June 20.
But rather than chasing the pack in hard rock spodumene or traditional brine field evaporation, the company is signalling a shift toward innovative extraction technology and more sustainable production models.
“We were new to DLE, so we built a starter plant [at Rincon in Argentina] and saw that the technology worked,” chief executive officer Jakob Stausholm said in May. “But when we acquired Arcadium Lithium, we gained access to 28 years of DLE experience [at Hombre Muerto, also in Argentina]. They invented it. We’re not experimenting – we’re scaling proven technology.”
Stausholm is set to leave his role at Rio Tinto later in 2025.
Direct lithium extraction (DLE) adoption remains in its infancy
DLE is likely to be a key discussion point at the 17th Fastmarkets Lithium Supply and Battery Materials conference in Las Vegas, US, June 23-26.
Attracting investment and developing future cost-competitive lithium supply remains a challenge in 2025, with spot prices for lithium salts and spodumene hovering at multi-year lows.
Fastmarkets’ assessment of the lithium carbonate 99.5% Li2CO3 min, battery grade, spot prices, cif China, Japan & Korea, was $7.50-8.60 per kg on Friday June 20. This compared with the all-time high of $80-82 per kg in November 2022.
Despite the weak pricing environment and expected high capital expenditure costs, DLE has become the prized goal of lithium supply innovation. It is believed to offer a faster, potentially less water-intensive extraction method that could unlock previously uneconomic brine deposits.
DLE promises to produce higher yields with a smaller footprint.
In addition to established sector participants such as Rio Tinto (through its $6.7 billion acquisition of Arcadium Lithium, which closed in March 2025), and Ganfeng Lithium, the race for commercially viable DLE has also attracted a slew of entrants, including Eramet, and several startup technology providers.
But aside from Arcadium Lithium’s project in Argentina’s Hombre Muerto region, DLE remains largely unproven at commercial scale outside of China. There, a number of market participants, including Jintai Lithium, Lanke Lithium and Zangge Lithium, are operating at commercial scale.
One example of the teething problems with DLE is shown by Paris-based minerals firm Eramet. Its Centenario lithium project in Argentina produced only 440 tonnes of industrial and technical grade lithium carbonate in the first quarter of 2025 through a DLE process, after a delay in the commissioning of equipment.
Other DLE projects are more hybrid in nature, such as Lithium Argentina and Ganfeng Lithium’s planned 2025 installation of a DLE demonstration plant at Cauchari-Olaroz in Argentina, with capacity for 5,000 tonnes per year. Yhis project seeks to combine DLE technology with traditional solar evaporation of brines.
Several other industry participants, including SQM and Albemarle, continue to advance traditional lithium projects with firm timelines and strong customer agreements.
Market participants have also told Fastmarkets that in the first quarter of 2025, China was restricting some exports of technology and equipment used for lithium iron phosphate (LFP) production and lithium refining, including for DLE. This left a potential technology and expertise gap in the ex-China market, one that many market participants, including Rio Tinto, are looking to fill.
Rio Tinto’s Rincon project in Argentina, alongside Hombre Muerto, is the centerpiece of its DLE effort. Acquired in 2021, the project is based on a lithium-rich brine resource in the Salta province.
Rather than relying solely on water-intensive evaporation ponds, a hallmark of South American lithium operations, Rincon is testing DLE, with a 3,000 tpy starter plant completed in late 2024, offering faster turnaround and a potentially smaller environmental footprint. The company plans to invest $2.5 billion to expand Rincon’s production capacity to 60,000 tpy.
In May 2025, Rio also committed to providing an “estimated $425 million in cash and non-cash contributions including its Direct Lithium Extraction (DLE) Technology” to the new Salares Altoandinos project, which it plans to develop jointly with Empresa Nacional de Minería (ENAMI), a Chilean state-owned mining company.
Although Rio Tinto maintains that DLE is proven technology, some market participants said that there are still challenges ahead for DLE technologies to overcome, especially regarding brines with challenging impurity profiles, as well as issues with producing at scale.
“In the current market, [working] DLE or brine production is the more logical option on a purely cost basis,” a lithium consumer told Fastmarkets, “but that doesn’t mean that it will be easy, and DLE is not always a ‘safe bet’ for production.”
Shifting away from spodumene
Rio’s additional attention on DLE to supplement its recent expansion in brinefield assets comes with the company appearing to shift its focus away from hard rock lithium. This is the source of most lithium in Australia and a method currently under margin pressure amid falling prices and high operating costs.
Spodumene prices were in steep decline throughout most of the period 2023-25, largely because of an oversupplied market. This was in stark contrast to their rapid rise to all-time highs in 2021-22.
Fastmarkets’ daily assessment of the spodumene min 6% Li2O, spot price, cif China, was $600-620 per tonne on June 20, down from an all-time high of $8,000-8,575 per tonne on November 24, 2022.
During Rio Tinto’s annual general meeting on May 1, Stausholm said that the company chose to acquire Arcadium Lithium, rather than an Australian spodumene producer, due to the company’s “a deep belief about cost curve.” He also noted that Rio was looking to produce “battery-grade lithium and not just spodumene.”
The closure of the company’s Mount Cattlin mine, at one time a staple of Australian spodumene production, highlights the mounting challenges in the hard rock sector.
In May 2025, Rio Tinto said that project work was progressing at its Canadian hard rock projects Galaxy and Nemaska. But in its previous guise as Arcadium Lithium, the company had planned to pause investment in Galaxy from August 2024.
Fastmarkets asked Rio Tinto for comment on this, but had received no response by the time of publication.
For Rio, embracing DLE may be a calculated risk with a high potential upside. If it can crack the technology at Rincon, and expand on its existing expertise at Hombre Muerto, and scale it effectively, it could leapfrog rivals and establish itself as a leading supplier of low-cost, low-carbon lithium.
That would be exactly the kind of material sought by automotive manufacturers and battery makers seeking secure long-term, ESG-compliant supply.
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