Hoping to Find Gold, Rio Tinto Strikes Lithium Instead

By Rhiannon Hoyle 

SYDNEY-- Rio Tinto PLC thinks it can become the biggest domestic producer of lithium in the U.S. without digging a new hole in the ground.

Rio Tinto plans to process piles of waste rock with chemicals at its operation at Boron in the Californian desert in a bet that they contain vast stores of lithium, a sought-after mineral that helps to power the world's electric-vehicle fleet. A test plant is under construction at the 90-year-old mine that has thrived on production of a different commodity--borates--until now.

Global miners are tapping waste pits for minerals as a way to squeeze extra profits from their existing operations quickly. New technology has made such efforts easier. Many commodities in waste dumps have gone from worthless to priceless, often in a matter of years, as prices boom.

Morgan Stanley predicts demand for lithium carbonate will roughly triple by 2025 from 2017 levels, driven by the growing popularity of electric vehicles. U.S. authorities also worry about future supply, with the Department of the Interior last year naming lithium among 35 mineral commodities that it considers critical to U.S. economic and national security.

For Rio Tinto, lithium wasn't the main target when it began sifting through the waste rock at Boron for overlooked minerals. It had hoped to find quantities of gold.

"Our team had a eureka moment when they did some testing to look for valuable minerals beyond boron in our waste rock and found high grades of lithium," said Bold Baatar, Rio Tinto's energy and minerals chief executive.

Currently the only lithium-carbonate production in the U.S. comes from Albemarle Corp.'s Silver Peak operation in Nevada, according to the U.S. Geological Survey. Yet preliminary tests showed some of the waste rock at Boron contained higher grades of lithium than several deposits in the U.S. currently being assessed for new mines.

"If the trials continue to prove successful, this has the potential to become America's largest domestic producer of battery-grade lithium--all without the need for further mining," Mr. Baatar said.

Rio Tinto said it plans to spend $10 million assembling the pilot plant, which will be able to produce 10 metric tons of lithium-carbonate equivalent annually, or enough for 30 Tesla Model S batteries. If it works, Rio Tinto could invest in a $50 million industrial-scale plant to produce 5,000 tons a year, or enough for around 15,000 batteries.

The Boron operation produces roughly half the world's supply of refined borate products, according to Rio Tinto. Borates are used in everything from fertilizers to cellphones to soap.

At a time when mining companies are under pressure for their environmental footprint, Rio Tinto said it expects production using waste rock at Boron will require less energy than new mines.

Australia and Chile accounted for most of the world's output of lithium last year, according to U.S. Geological Survey.

The Boron project isn't Rio Tinto's only bet on sustained demand for lithium. Management is separately assessing whether to build a mine at its Jadar lithium-borate deposit in Serbia.

Write to Rhiannon Hoyle at [e-mail]

(END) Dow Jones Newswires

October 22, 2019 02:50 ET (06:50 GMT)

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