One of the conglomerates of mining is making a big new multi billion dollar bet on lithium.
What’s happening:
- Rio Tinto (NYSE: RIO) has agreed to purchase Arcadium Lithium (NYSE: ALTM) for $6.7B USD in cash
By the numbers:
- Rio Tinto will buy Arcadium Lithium for $5.85 USD a share, which is a 90% premium to where shares of Arcadium were trading prior to Rio Tinto confirming they had approached them about an acquisition
Why it matters:
- Rio Tinto became one of the largest mining companies in the world through their iron ore, copper and aluminium operations which makes their new bet on lithium extremely notable
- Lithium carbonate prices have been in a major decline for a while, which has significantly slowed down the pace of mergers and acquisitions of lithium producers prior to this new buyout from Rio Tinto
Going deeper:
- Arcadium Lithium has hard rock lithium and brine projects in China, Argentina, Canada and Australia which Rio Tinto will now take over and advance
- Prior to the Rio Tinto buyout, Arcadium Lithium had been making their own acquisitions previously picking up a pilot plant from Li-Metal (CSE: LIM) to produce refined lithium metal from carbonate
- Publicly traded lithium companies have been making moves recently, with Li-FT Power (TSXV: LIFT) announcing their mineral resource estimate that validates they have one of the largest hard rock lithium properties in Canadian history and Sigma Lithium (NYSE: SGML) previously landing a major loan to advance their new Brazilian lithium production plant
