Rio Tinto Group (NYSE: RIO) is investing USD$2.5 billion into a new lithium project in Argentina in 2025.
The metals giant said on Thursday that it intends on building a processing plant at the Rincon site that will be able to handle approximately 60,000 metric tons of lithium carbonate. After all the permits are acquired, the company will get to work on the facility by the middle of next year.
Argentine lawmakers approved President Javier Milei’s marquee incentives program, known by its Spanish acronym RIGI a year after he was elected. The program offers tax, currency, and trade benefits for energy and mining. The measures are also enshrined in law for the next 30 years. Additionally, it’s one of the first incentive offerings in an attempt to attract more foreign direct investment.
Rio Tinto has earmarked lithium as a cornerstone of its commodity portfolio. Its investment in Argentina follows its October agreement to buy US miner Arcadium Lithium Plc (NYSE: ALTM) for about USD$6.7 billion. The firm is also exploring opportunities in Chile, including the possibility of entering Codelco’s Maricunga project. This is in addition to its ambitions towards building Europe’s biggest lithium mine in Serbia.
The company made the Rincon investment decision despite a pullback in lithium prices, with inventories piling up amid a gloomier outlook for electric-vehicle demand.
This slowdown has led miners in Argentina to reduce their expansion plans. Jacob Stausholm, CEO of Rio Tinto, said that his company aims to reverse the trend and accelerate Arcadium’s projects, with extra production from Rincon set to reach the market in 2028.
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Acquisition is a significant step in long term strategy for Rio Tinto
Rincon is located in Argentina’s Andean salt flats, part of South America’s “lithium triangle,” which holds more than half of global resources. Rio Tinto acquired the asset more than two years ago for about USD$800 million and recently began operating a 3,000-ton starter plant at the site.
“Acquiring Arcadium Lithium is a significant step forward in Rio Tinto’s long-term strategy, creating a world-class lithium business alongside our leading aluminium and copper operations to supply materials needed for the energy transition,” said Stausholm.
This year, companies including France’s Eramet SA and South Korea’s Posco Holdings Inc. (NYSE: PKX) have brought lithium plants online in Argentina.
International investors are also working to develop Argentina’s first major copper pits. Rio has exposure to the country’s copper riches through its Nuton venture, which holds a stake in Los Azules. The project recently passed a key permitting step and now needs to raise funds to build the mine.
Javier Milei’s platform focuses on free-market reforms, reducing public spending, and attracting foreign investment. Rio Tinto’s investments in Argentina align with his economic aims by boosting mining exports and attracting international capital.
Rio Tinto’s projects support Milei’s goal of making the country a global player in the energy transition. These moves demonstrate Argentina’s shift towards a business-friendly environment, fostering long-term economic growth and reducing reliance on agricultural exports.
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