Rio Tinto has approved a US$2.5 billion (A$3.93 billion) expansion of its Rincon lithium project in Argentina, underlining its confidence in growing global demand for lithium and South America’s potential to surpass Australia as the leading supplier.
The expansion aims to increase Rincon’s capacity to 60,000 tonnes of battery-grade lithium carbonate annually, building on its recent milestone of producing its first lithium from a 3,000-tonne pilot plant.
Construction of the expanded facilities is scheduled to commence in mid-2025, pending necessary permits, with initial production expected in 2028 and a ramp-up to full capacity by 2031.
Rio Tinto chief executive Jakob Stausholm highlighted the long-term potential of the lithium market driven by the global energy transition.
“This investment underpins our ambition to become one of the leading lithium producers globally while adhering to the highest ESG standards and fostering partnerships with local communities and Salta province,” he said.
The Rincon project, acquired in 2022 for US$825 million, represents Rio’s first commercial-scale lithium operation. The expansion leverages advances in direct lithium extraction and water management technology, aligning with Rio’s commitment to halve water usage in processing.
The investment aligns with Argentina’s Incentive Regime for Large Investments (RIGI), which offers benefits such as reduced tax rates and regulatory stability.
President Javier Milei’s economic reforms have drawn positive commentary from major miners, including Rio Tinto, BHP and Glencore, although the latter two have not pursued lithium ventures.
This latest move complements Rio’s US$6.7 billion acquisition of Arcadium Lithium, which includes further lithium brine projects in Argentina and Canada.
The company predicts lithium sales could contribute 13% of its earnings as it diversifies beyond its iron ore-dominated portfolio.