Rio Tinto,聽(ASX, LON:RIO), the world鈥檚 No. 2 miner, may become the largest lithium producer in the United States if a pilot project that is kicking off at its Boron mine, in the California desert, proves to be successful enough to be expanded.聽
The company will be studying ways to extract lithium from tailings at the 90-year-old open pit mine, which produces borates 鈥� a group of minerals used to make insulation fibreglass wind turbines and consumer goods such as soaps and cosmetics.
The potential annual output is enough for 15,000 Tesla Model S batteries
Rio鈥檚 discovery of lithium at Boron was a fluke. The miner was actually testing Boron鈥檚 tailings to see whether the presence of gold was significant and found instead traces of lithium at a concentration higher than domestic projects under development.
鈥淚f trials continue to prove successful, this has the potential to become America鈥檚 largest domestic producer of battery-grade lithium 鈥� all without the need for further mining,鈥� Rio Tinto鈥檚 energy and minerals chief executive, Bold Baatar, said Tuesday in an emailed statement.
The company has earmarked a $10 million investment to build a pilot plant that will be able to produce 10 tonnes a year of lithium-carbonate, needed in rechargeable batteries for electric vehicles (EVs) and high tech devices.聽If that works, Rio Tinto would consider investing in a $50 million industrial-scale plant to generate 5,000 tonnes a year 鈥� enough for around 15,000 Tesla Model S batteries.
The projected production would be roughly the same as the capacity of Albemarle聽鈥檚 Silver Peak mine in Nevada, which is currently the only lithium-carbonate producing asset in the country, according to the US Geological Survey.聽
鈥淚f trials continue to prove successful, this has the potential to become America鈥檚 largest domestic producer of battery-grade lithium鈥�
Rio Tinto鈥檚 energy and minerals chief executive, Bold Baatar .
Until now, the global miner鈥檚 incursion in the lithium market has been mostly limited to its 100%-owned lithium and borates聽mineral project in Jadar, Serbia. While still in the early stages of development, the company plans to seek board approval next year, with first production expected in 2024 鈥� the fastest possible development schedule for the operation.
Last year, Rio allegedly聽, the world鈥檚 second largest lithium聽producer.聽
In March, the head of new ventures and the company鈥檚 lithium division, Andrew Latham, said the company was 鈥渁ctively looking鈥� to invest in metals to be impacted by the EV market.
Prices for the white metal have dropped since mid-2018, ending a three-year rally, due partly to an avalanche of new supply coming mostly from Australia and signs of demand weakness.