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Rio Tinto (ASX, LON, NYSE: RIO) has of the Rincon lithium project in Argentina for $825 million, following Australia’s Foreign Investment Review Board (FIRB) approval of the transaction.

The world’s second-largest miner saw its lithium ambitions partially crushed in January after Serbia revoked Rio Tinto’s licence for the $2.4 billion Jadar project over environmental protests.

The Argentinean asset could help the company reignite its plans and strengthen its portfolio for the global energy transition.

Rincon is a large undeveloped lithium brine project located in the heart of the lithium triangle in Argentina’s Salta Province, an emerging hub for greenfield projects. 

The company said the asset, a long-life, scaleable resource, had the potential to have one of the lowest carbon footprints in the industry.

“Rincon strengthens our battery materials business and positions Rio Tinto to meet the double-digit growth in demand for lithium over the next decade, at a time when supply is constrained,” chief executive Jakob Stausholm said in the statement.

A July 2021 resource estimate of Rincon lists measured and indicated resources of lithium carbonate equivalent at 5.8 million tonnes, as well as inferred resources at just under 6 million tonnes.

The project has reserves of almost 2 million tonnes of contained lithium carbonate equivalent, sufficient for a 40-year mine life.

Rincon will use a direct, low-cost extraction technology that has the “potential to significantly increase lithium recoveries” compared to solar evaporation ponds, Rio said, adding that a pilot plant was currently running at the site.

The company also said that market fundamentals for battery grade lithium carbonate were strong, with lithium demand forecasted to grow 25-35% a year over the next decade. EV sales are on track to hit up to 55% of the world’s total light vehicles sales as early as 2030, reaching about 65 million units. 

This means, Rio has said, that manufacturers would need about three million tonnes of lithium per year, compared with the roughly 350,000 tonnes they consume today.

Rio Tinto estimates that committed lithium supply and capacity expansions will contribute only about 15% to demand growth over the 2020-2050 period. The remaining 85% would need to come from new projects.