Rio Tinto’s silent surge in western Australia’s lithium frontier
By Peter Milios
In a strategic move aimed at securing its foothold in the booming battery minerals market, global mining giant Rio Tinto (ASX:RIO) has been quietly amassing exploration tenements in Western Australia, covering a staggering 145,000 hectares. The company's latest foray into the lithium land grab highlights its ambition to play a significant role in the global decarbonisation effort and ensure a sustainable future in the rapidly evolving energy storage sector.
Rio Tinto's extensive claims include over 61,000 hectares in close proximity to the Kathleen Valley lithium project, which is currently being developed by Liontown Resources, a takeover target valued at $6.6 billion. Additionally, Rio Tinto is in the process of securing approximately 46,000 hectares of exploration ground situated north and southeast of the Mt Ida lithium project, jointly owned by industry heavyweights Gina Rinehart and Chris Ellison-backed Delta Lithium.
These exploration endeavors, most of which are pending approval by Western Australian authorities, position Rio Tinto in direct competition with established players like New York-listed Albemarle and Chile's SQM in the race to secure vital lithium assets required for battery production.
Dubbed the lithium "corridor of power," Western Australia has become a hotbed for lithium mining and battery materials due to its rich mineral resources. The region is already home to Rio Tinto's vast iron ore operations, providing a strategic advantage for the mining behemoth in its quest for lithium dominance.
While Rio Tinto's CEO Jakob Stausholm had previously expressed reservations about engaging in mergers and acquisitions due to high valuations in the lithium market, the company's recent actions suggest a different strategy. Mrs. Gina Rinehart, a prominent figure in the sector, recently acquired a 7.2 percent stake in Liontown Resources, which is itself the target of a $3-a-share takeover bid by Albemarle. Rio Tinto, however, has remained tight-lipped about its intentions as a potential consolidator and its growing exploration footprint.
One of Rio Tinto's tenement packages, covering about 40,000 hectares near Sandstone, is strategically located close to its existing partnership with ASX-listed lithium hopeful Everest Metals. The mining giant initiated the tenement application process in August of the previous year and has since expanded its land holdings with additional applications this year.
In addition to its stake in Delta Lithium, Gina Rinehart's Hancock Prospecting is also actively exploring for lithium near Mt Ida in partnership with the Indian government-backed Legacy Iron and Hawthorn Resources. The region's significance dates back to 1869 when Sir John Forrest, the great-great uncle of Andrew Forrest, famously named Mt Ida, sparking a gold rush in the 1890s.
Juno Minerals, led by CEO Greg Durack, has observed heightened activity centered around a geographical phenomenon known as the Mt Ida fault. Hancock is a major shareholder in Juno, a junior exploration company with land adjacent to the fault, underscoring the growing interest in the lithium-rich region.
With ASX nickel and lithium producer IGO also holding a substantial presence in the area through various joint ventures and exploration tenements, the Western Australian lithium sector continues to attract significant attention. IGO, keen to expand its lithium portfolio, particularly in conjunction with its stake in the Greenbushes mine, has faced challenges in this endeavor.
Greg Durack noted that Juno Minerals only began focusing on the lithium potential of its tenements a little over a year ago. Prior to that, the company's primary focus was on its hematite iron ore project linked to Esperance port and a substantial magnetite iron ore deposit.
The remarkable surge in Western Australia's lithium industry since Greg Durack's days with Pilbara Minerals underscores the sector's transformation, attracting both established mining giants like Rio Tinto and junior exploration companies seeking their own piece of the lithium-rich pie.