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Rio Tinto Bets on Unproven Lithium Tech in Chile Amid Price Slump

Global mining giant Rio Tinto is entering Chile’s lithium sector with two major projects—Maricunga and Altoandinos—in partnership with state-run miners Codelco and ENAMI, respectively. The move marks a significant shift for Chile, which has long relied on just two lithium producers: SQM and Albemarle.

Rio will lead operations at both sites, holding nearly 50% of Maricunga and 51% of Altoandinos, signaling its boldest step yet into the battery metal market. However, the strategy hinges on the deployment of direct lithium extraction (DLE)—a promising but yet unproven technology at commercial scale in Chile.

Why It Matters

  • DLE technology is more environmentally friendly than traditional brine evaporation, but has never been commercialized in Chile and still poses significant operational risks.

  • The move comes amid a 90% drop in lithium prices since late 2022, as global EV demand softens and oversupply persists.

  • Rio’s dual-deal entry follows its recent acquisition of Arcadium Lithium and a DLE pilot in Argentina, giving it a perceived edge over rival bidders.

Project Details

  • Maricunga Project (with Codelco):

    • Expected $900 million investment by Rio.

    • Construction to start in 3–5 years, pending environmental approvals.

    • Rio will lead all phases—design, build, operation, sales—and begin with DLE from day one.

    • A technical committee led by Rio will manage development until production, after which control shifts to a 50-50 split.

  • Altoandinos Project (with ENAMI):

    • Rio will invest $425 million initially to fund feasibility studies.

    • Partners were chosen through an independent selection process that included BYD, Eramet, Posco, and financial bidders like LG Energy and CNGR.

Market and Investment Climate

  • The entry into Chile comes as CEO Jakob Stausholm prepares to depart. Stausholm had championed Rio’s lithium expansion strategy.

  • Despite Rio’s growing stake, analysts remain cautious. RBC Capital Markets noted:

    “We have not heard from investors that they want to see further investment in lithium.”

  • Benchmark Minerals warned of Rio and Codelco overextending:

    “Too many fronts open… when justifying large investments in lithium is challenging.”

Strategic Considerations

  • Codelco will retain national oversight but allow Rio to lead on technical decisions early on.

  • DLE implementation will be closely scrutinized for scalability, efficiency, and sustainability.

  • Rio may receive an intellectual property permit in Chile if its DLE proves viable.

Outlook

Despite volatile prices and technical risk, Rio’s high-profile push in Chile signals a long-term bet on the future demand for lithium and its role in EV and energy storage markets. Its success will hinge on DLE performance and a rebound in lithium economics.

BHP and Rio Tinto to Develop Low-Carbon Iron Pilot Plant in Western Australia

BHP and Rio Tinto have announced plans to jointly develop a pilot plant aimed at producing low-carbon iron from Pilbara ores in Western Australia, marking a significant step in decarbonizing the global steel industry. The announcement, made in a joint statement on Tuesday, highlights the companies’ commitment to advancing sustainable practices in steel production.

Project Details and Technology

The new facility, located in the Kwinana industrial hub of Western Australia, will incorporate renewable energy and use Direct Reduced Iron (DRI) technology in an Electric Smelting Furnace (ESF) to produce molten iron. The pilot plant is expected to have an annual output of 30,000 to 40,000 tonnes of iron. If successful, this approach could lead to near-zero greenhouse gas emissions in iron and steel production, positioning Australian iron ore as a key resource for decarbonizing global steelmaking.

This project is critical as the steel industry is responsible for approximately 8% of global carbon emissions, largely due to the conventional methods used in iron ore smelting.

Collaboration with BlueScope and Woodside

The pilot project, which was initially announced in February as part of a broader effort to reduce emissions in the steel sector, will now proceed with finalised details including the location and output forecasts. The facility will be developed in collaboration with BlueScope Steel, a leader in the steelmaking industry.

Woodside Energy, a major energy provider, will also join the project as an equal equity participant and energy supplier, subject to final commercial agreements. This partnership, named NeoSmelt, is designed to leverage advanced technologies and renewable energy to significantly reduce emissions from steel production.

Timeline and Future Plans

The pilot plant is set to enter its feasibility study phase in Q2 2025, with a final investment decision expected by 2026. If the project proceeds as planned, operations are anticipated to begin by 2028. The companies are optimistic that the success of this initiative could pave the way for a broader shift toward sustainable steel production globally.

This collaborative effort aims to meet the growing demand for steel while contributing to global decarbonization goals, especially in industries like infrastructure and the net-zero energy transition, where steel is a key material.

 

Up Close with the 300-Tonne Driverless Trucks: The Future of Mining Automation in Remote Australia

At Rio Tinto’s Greater Nammuldi iron ore mine, located in inland Western Australia, automation is at the forefront of operations. The mine, situated in the Pilbara region, is so remote that workers are flown in for shifts, spending four to eight days on-site before returning home. With over 400 workers present at any given time, their task is to manage an expansive operation where massive, driverless trucks navigate the red-earth roads.

These autonomous trucks, some of the largest on earth, weigh up to 300 tonnes and crisscross the open-pit mine without human drivers. For someone unfamiliar with such technology, the sheer size of these trucks is daunting, especially when they operate without a driver at the wheel. During a site tour, the sight of one of these self-driving giants approaching from a side road is enough to raise the question: can they really be trusted?

Greater Nammuldi boasts a fleet of over 50 autonomous trucks, with several other vehicles, such as the self-driving water cart “Henry,” also operating to maintain the mine’s roads. While a few trucks still rely on manual drivers, most of the operations are automated. The autonomous trucks follow predefined routes and are monitored remotely from Rio Tinto’s Operations Centre (OC) in Perth, over 1,500 kilometers south. Here, controllers ensure the smooth functioning of the fleet, as well as other automated systems like drills and a long-distance rail network transporting mined ore.

The safety benefits of these self-driving trucks are clear. Mining is a dangerous industry, and by removing human drivers from the trucks, Rio Tinto aims to reduce accidents caused by fatigue or unpredictable behavior. According to the company’s Pilbara managing director, Matthew Holcz, automation has significantly improved safety and increased productivity by about 15%. The trucks operate continuously, without the downtime associated with shift changes, and can travel faster when fewer human-operated vehicles are in the mix.

Despite the cost – which Rio Tinto estimates at billions of dollars – automation has not led to mass job losses. Instead, former truck drivers are being retrained as controllers or reassigned to operate manual vehicles at different sites. At the OC, I meet Jess Cowie, a former manual driller who now remotely operates autonomous drills. She reflects on the benefits of automation, such as fewer environmental hazards and more time spent at home with her family.

However, the shift to automation isn’t without its challenges. Professor Robin Burgess-Limerick, an expert on human factors in mining, acknowledges the progress made but points out that improvements are still needed. For instance, the interfaces that staff use to monitor autonomous vehicles can be confusing, and there have been instances where human operators lost situational awareness. Additionally, some autonomous vehicles have had trouble detecting moisture on wet roads, which can lead to traction issues.

Labor representatives, such as Shane Roulstone from the Western Mine Workers Alliance, also raise concerns. He cites a recent incident where an autonomous train collided with a stationary vehicle on the tracks, though he recognizes that Rio Tinto has developed robust safety strategies for automated operations. Still, Roulstone believes that as automation increases, the potential for job losses will grow.

Despite these issues, Rio Tinto’s investment in automation continues, with further expansion of its autonomous truck fleet and the introduction of new technologies like self-driving excavators and dozers. While automation continues to change the landscape of mining, it’s clear that humans and robots will have to coexist, each adapting to a future where technology plays a central role.