Rio Tinto gets Australian taxpayer loan for an Argentinian project that is part of the threat to WA lithium

Rio Tinto will receive $US275 million ($383m) from the Australian taxpayer for a lithium project in Argentina while its WA lithium mine remains closed despite resurgent prices for the battery commodity. Export Finance Australia is providing the loan to Rio as part of a $1.6 billion funding package the mining giant has pulled together to get its $3.6b Rincon lithium development into production by the end of 2028. The EFA’s move has raised eyebrows given Rio has essentially turned its back on Australia’s hard-rock sources of lithium in favour of increasing its exposure to lithium brine in South America — including at Rincon. Brine operations, which are mainly clustered around the intersection of Argentina, Bolivia and Chile, involve drawing out lithium from groundwater beneath salt lakes. That was historically done via solar evaporation, but an evolving set of techniques termed ‘direct lithium extraction’ (DLE) has made the process much more efficient and poses a threat to the long-term viability of WA’s lithium hard-rock mines. Rio paid more than $10 billion for Arcadium Lithium in 2024, with the takeover target’s DLE technology and brine operations in Argentina being the prize. “It (DLE) is actually the solution to provide the lithium that the world needs,” former Rio chief executive Jakob Stausholm said of the acquisition. Rio also picked up the idle Mt Cattlin lithium mine near Ravensthorpe as part of its Arcadium purchase. Arcadium mothballed Mt Cattlin in September 2024 — culling about 300 local jobs in the process — when the price of the spodumene concentrate the mine produced was languishing at about $US850 per tonne. The price has since rebounded to more than $US2200/t, yet Rio has shown little interest in reopening the mine. “Export Finance Australia plays an important role in enabling Australian businesses to compete globally,” EFA managing director John Hopkins said of the Rincon investment. “Supporting Australian suppliers to participate in major export opportunities like Rincon strengthens capability and competitiveness.” Construction of the Rincon plant started last year, including camp expansion works and development of site infrastructure. First production is expected in 2028 with a three-year ramp-up to full capacity. The mine is expected to have a 40-year life. “This financing package broadens our funding sources for the Rincon project and supports the continued execution of our lithium growth pipeline, which is underpinned by the attractive long-term outlook driven by the energy transition.” Rio Tinto chief executive aluminium and lithium Jérôme Pécresse said. The World Bank’s International Finance Corporation, the Inter-American Development Bank and the Japan Bank for International Cooperation were the other lenders to Rio.