Rio Tinto to invest US$2.5 billion in lithium production

Anglo-Australian mining giant Rio Tinto on Thursday announced an investment of US$2.5 billion to ramp up domestic production of lithium carbonate, a key ingredient in electric car batteries.

"Rio Tinto has approved US$2.5 billion to expand the Rincón project in Argentina, the company's first commercial scale lithium operation," it said in a statement.

The mine in the northwestern Salta Province is located in the so-called ‘Lithium Triangle’ straddling Argentina, Bolivia and Chile, which is home to 60 percent of the world's lithium reserves, according to the US Geological Survey (USGS).

Rio Tinto said its investment in Rincón would take its production capacity from 3,000 tons to 60,000 tons per year by 2028.

The plant’s expansion is scheduled to begin in 2025 and it will be at full capacity in 2028.

Rio Tinto chief executive Jakob Stausholm praised Argentina's “favourable economic policies” and “investment-friendly environment” following President Javier Milei's economic reforms.

He specifically mentioned the approval of the RIGI investment incentive scheme, which guarantees investors tax, customs and exchange benefits for 30 years if they put in more than US$200 million.

Argentina was the world's fourth-biggest producer of lithium in 2023, after Australia, Chile and China, according to the USGS.

In July, the French mining group Eramet and its Chinese partner Tsingshan opened a lithium production plant in Salta.

Eramet chief executive Christel Bories said the plant would meet 15 percent of Europe's lithium needs.

Bolivia is also trying to cash in on surging demand for the silvery-white metal, which is also used to make rechargeable batteries for smartphones, laptops and other devices besides e-vehicles.

This year Bolivia signed a deal with Russia's Uranium One company to build a lithium extraction plant.

It also signed a contract with a subsidiary of the Chinese company CATL – the world's largest battery manufacturer – to set up two lithium extraction sites with a joint capacity of 35,000 tonnes a year.