Australia’s largest listed lithium players risk missing out on an expected wave of M&A activity after Rio Tinto’s $9.9 billion bid for Arcadium showed that junior producers were more likely to be targeted.

Rio’s landmark deal was a much-needed vote of confidence for the struggling sector, where prices have collapsed 80 per cent from their peak from a worsening supply glut. E&P Financial said this week that one more deal would “light up” lithium stocks again.