British mining firm Rio Tinto is inviting several major investment banks for pitches regarding any possible lithium mining/processing firms or mining projects in a bid to expand its operations to include a foray into the in-demand metal.
According to several insiders, representatives from these banks were recently at the Rio Tinto Group’s offices in Perth, Australia, ostensibly to discuss the terms of these pitches.
However, these insiders also warn that just because these meetings are happening does not mean that any deals are to be inked any time soon. Rather, it should be taken as a sign that Rio Tinto wants to stay abreast of opportunities within the mining sector, with particular regard to lithium and other metals crucial for the production of electric vehicle batteries, and if there are any firms or initiatives, it could buy out in the near future.
But with the price of lithium running high, the price of companies involved in mining or processing it is also on the expensive side at the moment.
Expanding to Capitalize on a Booming Sector
At present, Rio Tinto is the only major diversified mining firm that wants to get into the lithium game, particularly because it is in such high demand for EV batteries. Its interest is timely given how practically every country is caught up in the mad dash to shift to more renewable power sources and to reduce or completely do away with their dependence on fossil fuels.
Prior to current developments, the company actually planned to develop a lithium mine in Serbia which would have augmented the supply of lithium for German automakers who make up the bulk of Europe’s EV manufacturing sector. However, thanks to protests from environmental advocates, the Serbian government halted the initiative.
But this has not stopped Rio Tinto from moving forward with its foray into lithium. The company recently purchased an Argentinian lithium mine for $824 million and is set to begin operations by 2024, and has also cemented a supply agreement with US automaker Ford Motor.
Why Push Into Lithium?
Rio Tinto’s drive to get into the lithium business is not surprising, given how the global lithium supply needs to be augmented by five times its current amount to meet growing demand for electric vehicles and other technologies using green or renewable power.
With a potential shortage looming, this has prompted bidding wars among the world’s leading mining firms for assets worldwide, including those in non-traditional mining nations like Argentina.