Rio Tinto Ltd's (LSE:RIO, ASX:RIO, OTC:RTNTF) investor deep dive into its lithium business has left analysts at Citi more confident that the miner is carving out a competitive position in a weak market, laying the groundwork for rapid growth if prices recover.
Citi said Rio’s presentation in Buenos Aires centred on three pillars: delivering 200,000 tonnes of lithium by 2028, driving operating costs down to below $5–8 a kilogram, and rolling out its “30 in 30” template, a blueprint for future projects built at less than $30 a kilogram of capital intensity, in under 30 months, with C1 costs of under $5 a kilogram.
A key technological focus is shortening the time it takes to convert brine into lithium carbonate, a process that traditionally takes months.
Rio believes it can reduce that to a matter of days, a shift Citi noted could free “hundreds of millions” in working capital by speeding up the production cycle.
Commercially, Rio is aiming to lock in price certainty while keeping upside exposure. Around 40% of production is being marketed through long-term contracts with a price floor above current spot levels, with the remainder left open to capture any rebound.
Citi said that while lithium market conditions remain tough, Rio is building “a sizable footprint at the lower end of the cost curve”, giving it the option to accelerate new developments quickly should demand improve.