Mining giant Rio Tinto surrenders exploration ground and dodges questions on mothballed mine

Rio Tinto has surrendered almost 150,000ha of lithium exploration ground in WA and appears it will prioritise the brine-based production of the mineral Argentina is famous for.

Rio Tinto has surrendered exploration tenements covering vast tracts of land in Western Australia as it radically downsizes its lithium vision under new chief executive Simon Trott.

The mining giant has given up its hold on almost 150,000 hectares of ground in WA and is poised to offload the mothballed Mt Cattlin lithium mine as part of Mr Trott’s mission to transform returns.

Rio declined to respond to questions about why it had seemingly abandoned lithium exploration in Australia, or the future of the Mt Cattlin mine near the town of Ravensthorpe. Under former CEO Jakob Stausholm, Rio was part of a land grab that unfolded in 2022 and 2023, and focused its exploration on an area billed as lithium’s corridor of power.

Some of the exploration ground Rio has surrendered, or not bothered to renew, is near Liontown Resources’ Kathleen Valley mine and the Mt Ida lithium project controlled by Mineral Resources and Gina Rinehart-backed Delta Lithium. Much of the exploration ground it ceded was in a rough 250-kilometre line from Kathleen Valley to Mt Ida.

The Rio exploration team has not made a publicly disclosed discovery of significance in any mineral anywhere in the world since the Winu copper-gold project in WA in 2017.

New Rio Tinto chief Simon Trott.

The Mt Cattlin mine was already in care and maintenance when it was picked up by Rio in the $US6.7bn takeover of Arcadium Lithium earlier this year.

The company is making it increasingly clear that Australia is not part of its lithium future, which is focused on Argentina, and to a lesser extent other nations in South America as well as Canada.

It put the Jadar lithium project in Serbia into mothballs after years of permitting issues and local opposition.

WA is home to the world’s leading hard rock lithium mines, but it was not mentioned last week when Rio framed its strategy to the market. The company would eventually operate just one spodumene mine and that would be in Canada to supply the Bécancour refinery in Quebec.

It will choose between the Whabouchi and Galaxy projects. Both projects have gone through detailed engineering and early site works, with two years to start up, and would have a combined production capacity of more than 500,000 tonnes a year.

Rio lithium projects leader Djaber Belabdi told analysts the local market did not need that much spodumene, and reinforced that the company’s priority was brine-based lithium production in Argentina using standardised direct-lithium extraction technology.

“We are therefore undertaking a strategic business and capital discipline review with our partners in Canada to decide which of the two mines (Whabouchi and Galaxy) we will develop based on best for value,” he said.

Mr Belabdi has been in his lithium role for five months, elevated from Rio’s project director at the giant Simandou iron ore mine in Guinea, where he led delivery of the rail and port infrastructure with Chinese partners.

The Mt Cattlin mine was in care and maintenance when it was picked up by Rio as part of the Arcadium Lithium takeover.

Rio has said it intends to blend iron ore from Simandou shipped to China with product from its WA mines that are struggling with declining grades, and that it will adopt lessons learned from its Chinese partners in Guinea in developing new iron ore mines in WA and lithium projects in South America.

Rio lithium managing director Barbara Fochtman last week declined to confirm if Mt Cattlin was for sale. “We haven’t said so,” she said. Pushed on the issue, Ms Fochtman said Rio wasn’t ready to make that decision.

Ms Fochtman did confirm that Mt Cattlin, Jadar and one of the two Canadian spodumene projects were not included in the $US5bn-$US10bn of non-core asset sales flagged by Rio.

Mt Cattlin was the first of six new mines in WA that came into production during a lithium price boom in 2017. Arcadium put it on ice in September 2024 after prices started to crash.

Arcadium, created early in 2024 via the near $10bn merger of New York-listed Livent and Australia’s Allkem, was in turn gobbled up by Rio.

One of Mr Trott’s first moves was to address the unusual reporting arrangements around lithium. Mr Trott added lithium to Jerome Pecresse’s responsibilities running the Rio aluminium division.

Mr Pecresse said earlier this month that the lithium business would focus “only on a few priorities with one true north star in mind which is return on capital and the investment we make”.

Rio plans to spend about $1bn a year on growing its lithium business over the next three years. It expects lithium carbonate prices to move from the current level of $US9000 a tonne to more than $US17,000 a tonne from 2028 onwards, and annual revenue from the business to reach $US4bn by the end of the decade.

However, Rio also warned about the volatile nature of the still maturing lithium market and said that a plus or minus 25 per cent movement in price on those projections would create a $US1bn revenue upside or downside.

Originally published as Mining giant Rio Tinto surrenders exploration ground and dodges questions on mothballed mine