True value around $15-$18, page-400

When the time finally came for Rio Tinto to pull the trigger on a lithium acquisition, it looked past the numerous hard rock lithium mines in its Australian backyard.

Some of the world’s biggest lithium mines are in the Pilbara region, close to the Rio-owned railways and ports that carry iron ore to the world.

A Rio Tinto train runs through the Pilbara region. Bloomberg via Getty Images

Buying one of those West Australian lithium mines would have offered plenty of physical synergies and a familiar jurisdiction. But Australian spodumene rock wasn’t the focus when Rio chief Jakob Stausholm decided to spend $9.9 billion on a lithium acquisition last week.

“Our colleagues have worked extremely hard the whole year to try to look at every single lithium project in the world, and that has given us the confidence about what we want to be part of and what we don’t want to be part of,” he said, explaining the thinking behind buying Arcadium Lithium, an Argentinian-focused business.