Rio Tinto (ASX, LON: Rio) has made possible cost estimation and schedule review for its Rincon Lithium project in Salta Province Province, Argentina, which is an emerging green land project center. Rio Tinto released its latest operating results for the three months ended June 30th on Tuesday. The company stated that in response to rising costs, it is evaluating a cost estimate of $140 million and a timeline for developing a start-up plant in Rincon. Rio Tinto pointed out that the development work is still ongoing as usual, and the company is promoting the construction of campsites and is currently working on the opening of processing plants. In the past three years, this world's second largest miner has accelerated its pace of expanding its battery mining business. In early 2022, Serbia revoked Rio Tinto's license for a $2.4 billion lithium mining project, partially shattering Rio Tinto's lithium ambitions. Afterwards, Rio Tinto began searching for other locations.
In March last year, Rio Tinto acquired this Argentine asset, stating that it would help Rio Tinto meet the double-digit growth in lithium demand over the next 10 years, despite limited lithium supply. The resource estimation for the lithium project in July 2021 lists that the measured and indicated Lithium carbonate equivalent resource is 5.8 million tons, and the inferred resource is slightly less than 6 million tons. Rincon has reserves of nearly 2 million tons of Lithium carbonate equivalent, which is enough for the mine to use for 40 years. Rio Tinto plans to use direct, low-cost extraction technology in its operations, as it believes that this method "has the potential to significantly improve the lithium recovery rate" compared to solar evaporation ponds. The company has already operated a pilot plant in the local area, and still believes that the market fundamentals of battery grade Lithium carbonate are strong. It is expected that the demand for lithium will grow at an annual rate of 25-35% in the next decade. Y. Rio Tinto estimates that the promised lithium supply and capacity expansion will only contribute about 15% to demand growth between 2020 and 2050. The remaining 85% will need to come from new projects. This mining giant purchased shares in Sovereign Metals (ASX: SVM) (LON: SVML) for A $40.4 million ($27.6 million) this week. The goal of this Australian developer is to produce graphite for lithium-ion batteries on the Kasiya project in Malawi.