Rio Tinto’s $6.7 billion buyout of Arcadium will give it a suite of lithium filtration technologies that are poised to revolutionize how the metal is produced for the electronics and electric vehicle industries.
Arcadium’s expertise in so-called direct lithium extraction (DLE) is the real prize for Rio, analysts said, and vaults it into contention with Eramet, Sunresin, Exxon Mobil and others aiming to make the technology commonplace in coming years.
The DLE industry is expected to grow to more than $10 billion in annual revenue within the next decade by supplying lithium for EV batteries in hours or days, not months or longer as with existing large, water-intensive evaporation ponds and open pit mines.
While DLE technologies vary, they are comparable to filtration used by common household water softeners and aim to extract about 90 per cent or more of the lithium from brines, compared to about 50 per cent using ponds.
No one has launched a commercial DLE operation without ponds, although multiple companies are racing to be first.
Arcadium, through a predecessor company, was the first to develop an early version of a DLE technology in the 1990s at an Argentina lithium brine site that is still operational today.
While that site uses ponds in tandem with DLE, Arcadium’s decades-long experience with the technology makes it a tantalizing prize for Rio as it aims to develop lithium deposits in Chile, where officials are phasing out ponds and requiring DLE, and elsewhere.
“It (DLE) is actually the solution to provide the lithium that the world needs,” Rio CEO Jakob Stausholm told investors on Wednesday after announcing the all-cash deal. It values Arcadium at a 90 per cent premium to its share price before Reuters first reported the companies were in talks last Friday.
Arcadium’s Argentina DLE operations are located near a DLE project