Rio Tinto (RIO.L).(RIO.AX) expects its lithium business to grow faster than its copper, iron ore and other divisions as it works to triple production by 2028 for the electric vehicle and battery storage markets, an executive said on Tuesday.
The world's second-largest mining company jumped into the lithium sector last year when it bought U.S.-based Arcadium, a deal that brought access to mines, processing facilities and deposits across four continents, as well as a customer base that includes Tesla (TSLA.O).
Rio has been integrating those assets amid a lithium price crash caused in part by Chinese oversupply, a market malaise that forced a wave of industry layoffs and has only begun to abate in recent months.
Rio is now working to open mines in Argentina and Canada that it believes can be economical should prices drop again, Jérôme Pécresse, head of the company's aluminum and lithium business unit, told Reuters on the sidelines of the Fastmarkets Global Lithium, Battery and Critical Materials Conference in Las Vegas.
The company plans to produce at least 61,000 metric tons of lithium this year and have the capacity to produce 200,000 metric tons by 2028, should the market demand it.
"We want to show that we can build on time and on budget," said Pécresse, a former General Electric executive who joined Rio in 2023. "That's taking up 90% of my time."
He stressed that Rio aims to only bring online low-cost assets to supply customers that want long-term contracts, many of which have price floors and ceilings to protect both miner and buyer.
Still, he acknowledged that the lithium market is in a growth phase compared to other major global commodities, a reality borne out by lithium's rapid transformation from a niche material to a high-demand economic building block.
"It's a market that is trying to find itself, in a way," he said.
Pécresse, who sits on Rio's executive committee, declined to comment on any potential merger aspirations between Rio and Glencore (GLEN.L), citing a six-month standstill regulation that expires in August.
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Much of Rio's growth will come from the company's investment in direct lithium extraction, which was a key reason for the Arcadium buyout.
Pécresse said he expects one of Rio's DLE projects to launch within a few years. He added that Rio is not currently eyeing buyouts of other lithium projects.
"We're pretty happy with the Arcadium assets," said Pécresse, who noted that he personally drives a hybrid vehicle. "We have a clear roadmap to get to 200,000 (metric tons per year of production) by 2028."
While the Arcadium buyout and that growth could make Rio one of the world's largest producers of the battery metal, Pécresse said that is not his goal. Albemarle (ALB.N) is the top global producer.
"We don't have a strategy to be number one or, say, number three," he said. "Our strategy is to have a set of assets that are big enough to give us relevance with customers."
