Rio Tinto and Arcadium confirm takeover talks Peter KerOct 7,...

Rio Tinto and Arcadium confirm takeover talks

Peter KerOct 7, 2024 – 10.59am

Former Woodside boss Peter Coleman is mulling Rio Tinto’s advances as chairman of Arcadium. Trevor Collensnormal
“The approach is non-binding and there is no certainty that any transaction will be agreed to or will proceed. Arcadium Lithium will not comment further unless and until there is news to share,” said Arcadium in a statement.
Lithium prices are at a cyclical low, meaning the big challenge for Rio will be to convince Arcadium shareholders that its offer is not opportunistically timed and reflects value through the cycle, which is notoriously volatile in the lithium sector.
Arcadium was created in January through the merger of ASX-listed Allkem and US company Livent. While its primary sharemarket listing is in New York, it also has securities that trade on the ASX.
It produces lithium from groundwater in Argentina and also has hard rock lithium mining assets in Western Australia and Canada.
Arcadium also has a downstream processing division that turns raw lithium products into battery-grade products such as lithium hydroxide and lithium carbonate in Japan, China and North America.
While Arcadium is in the process of mothballing its only Australian asset – the Mt Cattlin mine – the company has strong Australian links, with former Woodside chief Peter Coleman its chairman.
The vertically integrated company contains lithium assets that were previously held by ASX-listed companies Orocobre and Galaxy, which merged to form Allkem in April 2021.
The bid fits with the strategic narrative outlined by Rio chief Jakob Stausholm in July, when he said the company wanted to grow its lithium business, particularly in Argentina or Chile.
Mr Stausholm said at the time that any deal needed to have synergies to warrant a takeover premium – a comment that put Arcadium in the spotlight, given Rio’s Rincon lithium asset in Argentina is located near Arcadium’s Hombre Muerto and Olaroz assets.