Rio Tinto (ASX:RIO) plans to invest $2.5 billion in its Rincon lithium project in Argentina.
The aim is to increase Rincon’s production capacity to 60,000 tonnes of battery-grade lithium carbonate per year. The project will combine a 3,000-ton start-up plant with a newly constructed 57,000-ton expansion facility. The development will support a mine life of approximately 40 years.
Construction of the expanded facility is expected to begin in mid-2025, subject to permitting, and first production is planned for 2028. Ramp-up to full capacity is expected to take three years, promising a significant job creation and economic benefits for the surrounding community. .
The announcement follows news that the company, alongside BHP, is facing possible class action lawsuits alleging widespread and systemic sexual harassment at Australian mining sites.
Direct lithium extraction
Rincon uses direct lithium extraction. DLE is a non-evaporative method. It uses chemical processes, ion exchange resins or adsorption to isolate lithium directly from brine water. This process contrasts with the more traditional evaporation pond method, which relies on solar evaporation to concentrate lithium over months or even years.
DLE is considered more sustainable than evaporation because it also produces lithium carbonate of higher consistency. However, this is a relatively new phenomenon in the context of large-scale production, and some analysts are cautious. Its commercial adoption is still in its early stages.
Rincon and Rio
Rincon is located in Argentina’s “lithium triangle”. The project’s ore reserves are now 60% greater than those initially estimated when Rio acquired Rincon.
Rio Tinto chief executive Jakob Stausholm highlighted the project’s alignment with Rio’s ambitions to become a leading lithium producer at the “bottom of the cost curve”. He added that the company’s DLE approach would cut water consumption in processing in half.
This investment is part of Argentina’s desire to become a leader in lithium. Economic reforms in Argentina and the introduction of the Large Investment Incentive Regime (RIGI) provide a favorable environment. RIGI offers benefits such as reduced tax rates, accelerated depreciation and regulatory stability for 30 years, protecting the project from future policy changes.
Rio shares closed down 2.76% on Friday at $120.72.
