Rio Tinto Limited (ASX: RIO) may experience significant impacts on its stock price based on the future success potential of its lithium business. A leading expert has shared insights regarding the mining giant’s venture into the battery materials field, emphasizing its importance.
In recent years, Rio Tinto’s stock price has seen considerable volatility, primarily driven by fluctuations in iron ore prices. However, the mining giant is actively working to diversify and grow its global business and profits by exploring forward-looking commodities such as copper and lithium.
Analyst Tony Paterno from Ord Minnett, a company listed on the Australian Securities Exchange, recently stated that Rio Tinto’s stock is a buy.
At an investor conference, Paterno recommended the mining stock and offered the latest information on Rio Tinto’s production expectations. He noted that Rio Tinto has reaffirmed its confidence in the acquisition of Arcadium Lithium CDI (ASX: LTM) as well as the broader lithium market prospects. The management team at Rio Tinto is optimistic about the lithium market, forecasting that the market size will “expand fivefold by 2035.” The combination of Arcadium with Rio Tinto’s Jadar and Rincon assets will position the company as “the third-largest lithium producer in the world.”
In announcing a $2.5 billion investment to expand Rincon, CEO Jakob Stausholm remarked, “The long-term attractiveness of lithium is supported by the energy transition, which underpins our investment in Rincon. We are equally committed to meeting the highest ESG standards, reducing process water use by half with our advanced technologies, and continuing to build mutually beneficial partnerships with local communities and the province of Salta.”
Over the past 12 months, Rio Tinto’s stock has declined by 6%. The company’s stock clearly reflects confidence in lithium’s significant role in the future.