December 27 (Renewables Now) - Anglo-Australian mining group Rio Tinto Plc (LON:RIO) has signed a binding agreement to buy for USD 825 million (EUR 729.4m) a large undeveloped lithium brine project in Argentina.

The company announced the deal for the Rincon lithium project last week and said it comes in line with its plan to build its battery materials portfolio. Rio Tinto added that the project could achieve one of the lowest carbon footprints in the industry.

“This acquisition is strongly aligned with our strategy to prioritise growth capital in commodities that support decarbonisation and to continue to deliver attractive returns to shareholders. The Rincon project holds the potential to deliver a significant new supply of battery-grade lithium carbonate, to capture the opportunity offered by the rising demand driven by the global energy transition,” said CEO Jakob Stausholm.

Global lithium demand is forecast to grow 25%-35% per year over the next decade and there are projections for a significant supply demand deficit from the second half of this decade.

The project, located in the heart of the lithium triangle in the Salta Province, is a long life, scaleable resource capable of producing battery grade lithium carbonate. The firm’s plan is to use a direct lithium extraction technology, offering significantly higher lithium recoveries as compared to solar evaporation ponds. A pilot plant is already operational at the site.

Rio Tinto’s acquisition of Rincon Mining Pty Ltd, the owner of the Salar del Rincon Project in Argentina, and of Lithium Extraction Technologies (Australia) Pty, is to be wrapped up in the first half of 2022, subject to receiving the green light from Australia's Foreign Investment Review Board (FIRB).

The new owner will seek to finalise studies to confirm the resource and define an Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, 2012 (JORC Code) compliant resource statement. It will need to determine the development strategy and timing, secure updates to existing environmental permits, and undertake ongoing engagement with communities, the province and the Government of Argentina.

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Tsvet has been following the development of the global renewable energy industry for almost nine years. She's got a soft spot for emerging markets.

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