Chile’s state-run mining body ENAMI has tapped Rio Tinto for a 51% share of the Altoandinos lithium project, it said on Thursday, giving the global miner its second major venture in Chile for extraction of the key battery metal.
Rio said it would initially contribute $425 million to the project to fund studies required before a final investment decision.
Rio’s selection – in which it beat out French miner Eramet, Chinese carmaker BYD and Korean steel group Posco – further raises its profile in Chile, the world’s second-largest producer of lithium, following its selection this week by state-run copper miner Codelco to partner on the Maricunga lithium project.
Rio had already launched a strong push into Latin America with its projects in Argentina, including Rincon and several it acquired in the takeover of U.S. firm Arcadium under the leadership of CEO Jakob Stausholm, whose surprise departure later this year was announced on Thursday.
For Altoandinos, Rio’s investment will cover a pre-feasibility study, the use of the Rio pilot plant at Rincon, and the use of Rio’s direct lithium extraction technology (DLE), ENAMI said.
Rio will take three board seats, with two others going to ENAMI.
“Rio Tinto provides a financing option that ensures the necessary resources for the project until it reaches commercial operation,” ENAMI said in a statement.
The project, which comprises the Aguilar, La Isla and Grande salt flats, could yield 75,000 metric tons of lithium per year, and will be designed to use DLE in order to preserve the area’s water composition, ENAMI said.
ENAMI told Reuters that it and Rio would jointly evaluate financing proposals from companies that had previously expressed interest – China’s CNGR Advanced Material Co Ltd and South Korea’s LG Energy Solution.
In addition to the lithium projects in Chile, Rio also is a partner with Codelco on copper exploration at Nuevo Cobre.
Rio said its goal for Chile is to develop a “copper and lithium district” through shared infrastructure across the projects.
It also hinted at interest in further acquisitions in the sector.
“Rio Tinto … will continue to evaluate Tier 1 opportunities globally as it gains momentum in building a world-class lithium business,” it said in a statement.
(Reporting by Daina Beth Solomon)
