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The transaction will bring Rio Tinto’s scale, development capabilities and financial strength to realise the full potential of the Arcadium portfolio.
Tier 1 assets
Arcadium is one of the world’s leading global lithium platforms, with diversified production and processing capabilities, a broad range of high-performance lithium products, a highly attractive suite of growth projects, and long-term blue-chip customer relationships.
Arcadium’s Tier 1 assets have maintained high margins through-the-cycle, and its resource base is expected to support ~130% capacity1 growth by 2028 within Rio Tinto’s existing geographies.
Rio Tinto’s and Arcadium’s combined assets will represent the world’s largest lithium resource base and make Rio Tinto one of the leading lithium producers globally.
Complementary capabilities
Rio Tinto has the balance sheet strength and proven project delivery capability to execute and, over time, accelerate the full potential from Arcadium Lithium’s Tier 1 resource base.
Rio Tinto and Arcadium have complementary footprints and deep experience in Argentina and Quebec, where Rio Tinto expects to establish world-class lithium hubs with clear opportunities for sharing skillsets and reducing costs.
Combining Rio Tinto and Arcadium’s technological leadership in lithium extraction, the transaction will position Rio Tinto to become a market leader in lithium processing.
Rio Tinto looks forward to building on Arcadium’s history of commercial excellence that includes multi-year relationships with leading OEMs and battery companies.
Compelling economics
Transaction offers compelling value driven by accelerating volume growth in a rising market contributing to significantly higher EBITDA and free cash flow in the outer years, before anticipated synergies.
Rio Tinto will maintain strong balance sheet, in line with its Single A credit rating, and long track record of shareholder returns.
Rio Tinto expects Arcadium’s projected growth capital expenditure to represent ~5% of Rio Tinto’s group capital expenditure of up to $10 billion across 2025 and 2026.
Right timing
Rio Tinto is confident in the long-term outlook for lithium, with >10% compound annual growth rate in lithium demand expected through to 2040 leading to a supply deficit.2
With spot lithium prices down >80% versus peak prices, counter-cyclical acquisition comes at a time with substantial long-term market and portfolio upside, underpinned by an appealing market structure and established jurisdictions.
1Excludes Mt Cattlin. 2Benchmark Mineral Intelligence (BMI) benchmark supply and demand forecast as of September 2024.
