Background on Rio Tinto and Lithium’s Importance
Rio Tinto, the second-largest global mining company, has entered into a partnership with Chile’s National Mining Corporation (ENAMI) to explore lithium in the Altoandinos Salars. This agreement marks Rio Tinto’s second collaboration in Chile to extract this strategic mineral crucial for the global energy transition.
Who is Rio Tinto?
Rio Tinto is an Anglo-Australian multinational mining corporation with operations in 35 countries. The company is known for its significant presence in various minerals, including iron ore, aluminum, copper, and gold. With lithium becoming increasingly important for the transition to clean energy, Rio Tinto has expanded its focus to include this critical mineral.
Why is Lithium Important?
Lithium is a vital component in the production of batteries for electric vehicles and electronic devices. As the world moves towards sustainable energy solutions, demand for lithium is expected to rise dramatically. Chile, the world’s second-largest lithium producer after Australia, holds significant reserves of this mineral.
Details of the Agreement
Under this new agreement, Rio Tinto will invest approximately $3.425 billion and take control of the project by owning 51% of the property. The project encompasses three salars: Aguilar, La Isla, and Grande, located in Chile’s Atacama region.
ENAMI reported that the project has the potential to become a world-class lithium deposit, according to Jakob Stausholm, Rio Tinto’s CEO.
Previous Lithium Agreements in Chile
This recent partnership is Rio Tinto’s second lithium exploration agreement in Chile. Earlier, on Monday, Rio Tinto announced a pact with the state-owned copper company Codelco to work on Maricunga, which holds the world’s second-largest known lithium concentration.
In this Codelco project, the Chilean company will maintain control over operations.
Project Timeline and Impact
The Salares Altoandino project, situated in Chile’s Atacama region, is expected to commence operations by 2030 and extract up to 75,000 tonnes of lithium carbonate annually.
The project will employ direct lithium extraction technology, differing from the evaporation method currently used in most salars.
Chile’s Lithium Strategy
In 2023, under President Gabriel Boric’s left-leaning government, Chile launched the National Lithium Strategy. This strategy aims to expand lithium exploitation through public-private partnerships across several salars in the country.
Given its strategic importance, Chile’s lithium production is strictly regulated, with only the state allowed to manage its output.
Key Questions and Answers
- What is this new agreement about? Rio Tinto has partnered with Chile’s ENAMI to explore lithium in the Altoandinos Salars, investing $3.425 billion and taking 51% control of the project.
- Why is lithium important? Lithium is crucial for manufacturing batteries in electric vehicles and electronic devices, playing a significant role in the global energy transition.
- What is Rio Tinto’s role in Chile’s lithium sector? Rio Tinto has two ongoing lithium projects in Argentina and Serbia, in addition to this new Chilean partnership.
- What is the significance of direct lithium extraction technology? This innovative method differs from traditional evaporation techniques, potentially offering more efficient and environmentally friendly lithium extraction.
- What is Chile’s National Lithium Strategy? Launched in 2023, this strategy aims to expand lithium production through public-private partnerships across various salars in Chile.
