Rio Tinto plans to create a standalone lithium division after acquiring Arcadium Lithium for $6.7 billion. The new division, Rio Tinto Lithium, will focus on integrating Arcadium's expertise and assets, including the Rincon project in Argentina. Rio executives aim for a gradual integration to retain Arcadium's talent. This acquisition positions Rio Tinto as the world's third-largest lithium producer.
plans to create a standalone lithium division after it closes its $6.7-billion acquisition of Arcadium Lithium, according to an internal memo seen by Reuters.
This is to “ensure we give laser focus to successful integration once the transaction completes,” Rio’s Stausholm told employees in the memo.Given that unfamiliarity with integrating an entire company, Rio executives plan to absorb Arcadium slowly out of concern that forcefully integrating the lithium producer could prompt an exit of talent that could abrogate the deal’s value, according to two sources with knowledge of the matter.
The deal will make Rio the world’s third-largest producer of lithium, a metal used to build batteries for electric vehicles and many electronics, just as demand is expected to increase later this decade after a recent supply glut. Rio’s existing Minerals division has struggled in the past few years to gain approval for its planned lithium project in Serbia due to opposition from locals and environmental groups. Meanwhile, it has expanded production plans for the battery metal at its Rincon project and is on the shortlist to partner with Chilean state miner Codelco on a new lithium project.
LITHIUM ACQUISITION RIO TINTO ARCADIUM ENERGY TRANSITION
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