Rio Tinto to expand business into lithium industry

Rio Tinto is planning to step into the lithium industry in the United States following the booming prospects for the new energy vehicles (NEVs) sector.

Rio Tinto will pilot the production of lithium salts following a study to extract lithium from waste rock at their borates mine in the Mojave Desert in California, the company said.

Should the pilot scheme succeed in producing its forecast 10 tonnes per year of lithium salts, the miner plans to construct a 5,000 tpy lithium salts plant costing $50 million.

Rio Tinto did not say when it will commence its pilot scheme or the construction of its 5,000 tpy lithium salts plant.

Rio owns quantities of waste rock with high content of lithium concentrate from the tailings of its borates production used to make soaps, cosmetics and others consumer goods in the Mojave Desert, about 195km north of Los Angeles.

The lithium content of the waste rock is higher than at other lithium projects in the United States, Rio said without revealing the lithium concentrate percentage.

According to the data from Fastmarkets’ research team, lithium salts supply is estimated to reach 350,000 tonnes in 2019. The annual production of 5,000 tonnes of lithium salts at Rio’s planned plant is only a small volume by comparison, but signals emerging interest in lithium as a key battery raw material due to its booming future.

“It is great to see a diversified mining major getting more involved and interested in lithium, especially in what will be a major area for demand. Given the amount of additional lithium that will be needed in the decades ahead, we will need to see more commitment and on a bigger scale,” William Adams, head of battery raw materials research at Fastmarkets, said.

Lithium is widely used in battery materials for NEVs and demand is expected to increase in the coming years, supported by an optimistic outlook for the NEV industry.

But the lithium market has been on a downtrend since 2018 due to sparse buying activity from the downstream cathode sector.

Fastmarkets’ lithium carbonate, 99.5% Li2CO3 min, battery grade, exw domestic China, spot price was most recently at 56,000-60,000 yuan ($7,859-8,560) per tonne on Thursday October 17, down from 56,000-61,000 yuan per tonne in the previous week. The price stood at 75,000-83,000 yuan per tonne on January 3, 2019, and has fallen from 160,000-165,000 yuan per tonne at the start of 2018.

One reason battery cathode makers have slowed their procurement of lithium compounds is the Chinese government has been gradually reducing the subsidy paid to EV producers, halving the incentive in June this year.

The government aims to encourage the production of high performance batteries alongside vehicles with longer driving range over those with lower driving range and battery density via these reduced subsidies, Fastmarkets reported at the time.