Rio's takeover of Arcadium lithium signals the lithium bear market could end sooner than thought
with Rio putting the need for lithium in the spotlight. Rio Tinto $Rio Tinto (RIO.US)$ will soon become one of the largest lithium suppliers, second only to Albemarle and SQM.
It comes as it inked a deal to takeover Arcadium $Arcadium Lithium (ALTM.US)$ $Arcadium Lithium PLC (LTM.AU)$ for $5.85 per share, valuing the deal at $6.7 billion. This represents a 90% premium to Arcadium's closing price on October 4th ($3.08). The transaction is expected to close in mid-2025.
The stock price of Arcadium Lithium has risen more than 40% this week on the news of the acquisition.
Rio Tinto CEO Jakob Stausholm said the acquisition is
"an important step forward in Rio Tinto's long-term strategy to build a world-class lithium business on the basis of its leading aluminum and copper businesses, supplying materials needed for energy transformation."
Arcadium has large lithium reserves across four continents, which is an attractive target for Rio. From Arcadium's perspective, Rio's huge Balance Sheet will enable these lithium assets to be developed in a timely manner to meet the expected surge in global demand in the next decade. Rio Tinto's Rincon project in Argentina is expected to start production later this year, while its Jadar project in Serbia may take at least two years to obtain all necessary licenses.
This acquisition could signal the start of more mergers and acquisitions in the lithium market.
And importantly, this comes at a time when lithium prices have risen for the first time since May amid supply concerns and expectations demand will rise amid China's mass stimulus.
THIS IS A BIG DEAL FOR ALL LITHIUM INVESTORS.
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In further good news for the entire lithium sector, lithium carbonate prices have risen month-on-month for the first time since May 2024.
This was driven by China's new stimulus packages, while several lithium mines remain closed. So my thesis could come true > the supply deficit, will likely be brought forward > and can push prices up sooner than expected
For more on Rio. Read the news here - Oct 9. Or Read/ watch for more RIO AND LITHIUM - Recorded Oct 8.
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Deltaman099 : I have invested in altcoins.
MasonHu : When I bought it, it was worth 10 dollars. Rio really knows how to pick up bargains. Will the ltm stocks be delisted after buying them? Isn't that a forced sell-off?
SnowVested : look at that arcadium stock fly up..