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Rio Tinto (ASX:RIO) has given up as much as 150,000 hectares in Western Australia and will soon offload its mothballed Mt Cattlin mine as new chief Simon Trott looks to largely downsize the company’s once-grand lithium plans.
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The Australian mining superpower had joined the lithium land grab through to 2023 in a big way, scooping up vast tracts in “lithium’s corridor of power.”
Mr Trott isn’t such a fan of that plan, though, and is now overseeing a regression on Rio’s Australian lithium focus. Instead, he believes the future of the green metal lies in Argentina and other emerging South American countries.
A similar retraction is being planned in Canada, where Rio Tinto is looking to keep just a single spodumene mine to supply the Bécancour refinery in Quebec.
“We are therefore undertaking a strategic business and capital discipline review with our partners in Canada to decide which of these two mines we will develop, based on best value,” Rio’s lithium projects leader, Djaber Beladbi, told Oz analysts. The two mines mentioned are Whabouchi and Galaxy.
Rio has yet to confirm that Mt Cattlin is for sale – the company’s lithium MD, Barbara Fochtman, refused to speak on it last week – and it’s likely the Oz bourse blue-chip is still deciding how to approach that major move.
The mining giant originally acquired Mt Cattlin earlier this year, during the US$6.7 billion Arcadium Lithium takeover. (It was already mothballed then.)
Never say never, though: Mr Trott has always insisted Rio will return to lithium, once it makes sense financially. Rio’s aluminium/lithium helmsman, Jerome Pecresse, also said the lithium biz would be focusing “only on a few priorities, with one true north star: A return on capital and investment we make.”
There are also already plans for Rio Tinto to spend another $1B a year furthering its global lithium plans through the next three years – it just won’t be on Aussie shores until the battery material’s market recovers again.
The end goal, Rio concluded, is to rake in US$4B a year from lithium by 2030.
RIO shares have been -1.4% lower today, at $141.33/ea.
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