Rio Tinto (ASX, LON, NYSE: RIO) has flagged a likely cost estimate and schedule review for its Rincon lithium project in Argentina’s Salta Province, an emerging hub for greenfield projects.
The world’s second largest miner, which released an operational update for the three months to June 30 on Tuesday, said the US$140 million cost estimate and schedule to develop a starter plant at Rincon was under review in response to cost escalation.
Rio Tinto noted that development work continues as usual with the company advancing construction of the camp and ongoing enabling works for the processing plant.
The world’s second-largest miner has sped up efforts in the past three years to boost its exposure to battery minerals.
After seeing its lithium ambitions partially crushed when Serbia revoked the miner’s licence for a $2.4 billion project in early 2022, Rio Tinto began looking elsewhere.
In March last year, the company bought the Argentinean asset, saying it would help Rio Tinto meet a double-digit growth in demand for lithium over the next decade, at a time when supply is constrained.
A July 2021 resource estimate of the lithium project lists measured and indicated resources of lithium carbonate equivalent at 5.8 million tonnes, as well as inferred resources at just under 6 million tonnes.
Rincon has reserves of almost 2 million tonnes of contained lithium carbonate equivalent, sufficient for a 40-year mine life.
Rio Tinto plans to use a direct, low-cost extraction technology at the operation, as it believes the method has the “potential to significantly increase lithium recoveries” compared to solar evaporation ponds.
The company, which is already running a pilot plant onsite, continues to think that market fundamentals for battery grade lithium carbonate are strong, with lithium demand forecasted to grow 25-35% a year over the next decade.
Rio Tinto estimates that committed lithium supply and capacity expansions will contribute only about 15% to demand growth over the 2020-2050 period. The remaining 85% would need to come from new projects.
The mining giant bought a stake this week in Sovereign Metals (ASX: SVM) (LON: SVML) for A$40.4 million ($27.6 million). The Australian developer aims to produce graphite for lithium-ion batteries at its its Kasiya project in Malawi.
THIS STORY FIRST APPEARED ON MINING.COM.
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