Rio Tinto: Lithium to Become Fastest-Growing Division, Targeting 200K Tonnes Capacity by 2028
Alina Collins
Rio Tinto's lithium head Pécresse says lithium will outpace copper and iron ore as the company's fastest-growing division, with production targets rising to 200,000 tonnes by 2028 — a signal that the mining giant is repositioning itself as a core lithium supply-chain player.
From 61kt to 200kt — how does Rio triple lithium output?
Rio plans to produce at least 61,000 tonnes of lithium this year, scaling to 200,000 tonnes per year by 2028.
The ramp-up rests on last year's acquisition of U.S. lithium producer Arcadium, which gave Rio mines, processing facilities, and reserves across four continents — with customers including Tesla.
This means → one deal handed Rio a global lithium asset network that would otherwise take a decade to assemble. The task now is converting that portfolio into actual output.
"We have no strategy to be number one" — so what is the strategy?
Pécresse explicitly denied that becoming the world's largest lithium producer is a company goal. The current leader is Albemarle.
His words: "We have no strategy to be number one or number three. Our strategy is to have a large-enough portfolio of assets to be relevant to our customers."
In plain terms = Rio doesn't want the crown — it wants to be too big for customers to walk away from. Scale serves bargaining power, not bragging rights.
Low-cost assets + long-term contracts — how to survive the lithium price rollercoaster?
Rio is devoting 90% of its effort to two new mines in Argentina and Canada, both considered economically viable even if lithium prices fall again.
On the sales side, Rio favours long-term contracts with price floors and ceilings that protect both miner and buyer.
This reflects a full cycle-proofing playbook: pick the most resilient mines on the cost side, lock in a price band on the revenue side — hedge both ends.
Lithium prices already crashed once — where does the market stand now?
Rio's integration of Arcadium coincided with a lithium price collapse driven by Chinese overcapacity, triggering industry-wide layoffs. Prices have only recently begun to stabilise.
Pécresse characterised lithium as a "market still finding its own identity" — a growth-phase market.
This means → lithium has graduated from a niche material to a high-demand commodity, but its pricing mechanisms and supply-demand balance remain unsettled. Volatility is the norm, not the exception.
DLE technology — what drives the next phase of growth?
Direct lithium extraction — DLE, a newer process that pulls lithium straight from brine, faster and with less water than traditional evaporation — was a core strategic rationale behind the Arcadium deal.
Pécresse expects one of Rio's DLE projects to be operational within several years and says the company is not looking to acquire additional lithium assets.
In plain terms = Rio believes it already holds enough cards. The race now is about who commercialises the new technology first and turns capacity into cash.
The Glencore merger rumour — what did Rio say?
Asked about a potential merger with Glencore, Pécresse declined to comment, citing a six-month quiet period expiring in August.
This reflects an open question: whether Rio's M&A stance shifts once the quiet period ends will be a key test of its strategic boundaries.
The non-denial is itself a signal — silence preserves optionality.
Content is for reference only, not financial advice.