Rio to advance Chilean lithium

Rio Tinto (ASX: RIO) has signed a binding agreement with Empresa Nacional de Minería (ENAMI) to form a joint venture lithium project in the Atacama region of Chile.

The company was selected as the Salares Altoandinos project’s preferred partner after a competitive negotiation phase with BYD Chile SpA, Eramet Chile SA and POSCO Australia.

With the agreement, Rio Tinto has agreed to acquire a controlling 51% stake in the project and will provide up to $425m, in both cash and non-cash contributions, to advance the project.

The funding will support the project’s pre-feasibility study and further studies. Rio will also be applying its direct lithium extraction (DLE) technology at the operation.

Subject to receipt of all applicable regulatory approvals and the satisfaction of other customary closing conditions, the deal is expected to close in the first half of next year.

Rio Tinto minerals chief executive Sinead Kaufmann says the company is continuing to execute its strategy of building a world-class lithium portfolio.

“The Salares Altoandinos project represents a significant opportunity to develop a large-scale, long-life, low-cost lithium brine resource,” she said.

“We are committed to the highest environmental standards and to ensuring any potential development is guided by transparent, respectful and ongoing engagement with local communities in Chile’s Atacama region.”

Earlier this year, Rio Tinto completed its acquisition of Arcadium Lithium for $6.7b — establishing the company as a global leader in the supply of energy transition materials and a major lithium producer.