Rio Tinto’s ‘eureka moment’ with Californian lithium find

October 23, 2019

Rio Tinto


Mining giant Rio Tinto has announced it is to launch a pilot project to produce battery-grade lithium from the tailings (waste rock) produced at their open pit Boron site in California.

The discovery came when workers at the site chanced upon high grades of lithium whilst searching through the ‘waste’ to determine how much gold and other minerals were present.

The borate mine has been open for over 90 years, and the amount of tailings means this could be a hugely important reserve as the demand for the battery metal is anticipated to rise over the coming years combined with a scarcity of new sources of lithium close to the American auto industry.

The Chief Executive of Energy and Minerals at Rio Tinto, Bold Baatar, said: “Our team had a eureka moment when they did some testing to look for valuable minerals beyond boron in our waste rock and found high grades of lithium.”

Commenting on the future potential scale of the operation, Mr Baatar said: “If the trials continue to be successful, this has the potential to become America’s largest domestic producer of battery grade lithium — all without the need for further mining.”

Rio Tinto said that the lithium found in the tailings had a higher concentration that other deposits currently under review in the US.

The company has initiated the construction of a $10m pilot plant to evaluate the process. Rio Tinto have said that they believe the process they intend to use to produce battery-ready lithium carbonate will be more sustainable, as they will be processing material that has already been mined.

The pilot plant is anticipated to be able to produce up to 10 tonnes of lithium carbonate a year. If successful, Rio Tinto have said their next step would be the construction of a $50m industrial-scale plant to produce 5000 tonnes of lithium carbonate a year.

‘Lithium needs a Rio Tinto’ states Benchmark

Lithium pricing experts Benchmark Mineral Intelligence have commented on this Rio Tinto lithium story on their blog, pointing out that despite their Benchmark Mineral Lithium Price Index falling by 17% from the beginning of the year to the end of September, demand for lithium this year is expected to increase by between 14-16%. Benchmark attribute this drop in pricing to an oversupply of spodumene (the major hard-rock source of lithium) and a slowing in demand for electric vehicles.

Moving away from these short-term fluctuations, Benchmark are forecasting lithium demand to reach 2.2m tonnes by 2030, fuelled by electric vehicles growing to 30% of the market by that date, from 4.3% in 2020. With supply currently only expected to reach 1.67m tonnes by 2030, a huge shortfall the likes of which only major players like Rio Tinto entering the lithium space can address.

Benchmark conclude by saying that this project in general helps position Rio Tinto as the move to electric vehicles and ‘clean energy’ takes hold. Specifically, a project at this scale is a way for them to make  is a low cost, low risk way to gain the necessary experience in lithium processing, perhaps of use in their Jadar deposit in Serbia, but also of broader use if they consider acquiring further lithium assets.

Read more on the Benchmark blog.

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MiningIR hosts a variety of articles from a range of sources. Our content, while interesting, should not be considered as formal financial advice. Always seek professional guidance and consult a range of sources before investing.
James Hyland, MiningIR