Chile’s state-owned mining company Codelco announced on Monday that it will partner with global mining giant Rio Tinto on the development of its new Maricunga lithium project.
The deal brings a major new player into Chile’s lithium sector, the world’s second-largest producer of the critical metal used in electric vehicle (EV) batteries.
Following a competitive selection process, Rio Tinto will become the third private firm operating in Chile’s lithium industry, joining long-time producers SQM and U.S.-based Albemarle.
As demand for lithium continues to grow, driven by the global transition to electric vehicles—mining companies, automakers, and battery manufacturers are racing to secure supplies. The Maricunga project lies within South America’s so-called “lithium triangle,” home to the planet’s largest reserves of the metal.
Under the terms of the agreement, Rio Tinto will invest up to $900 million in exchange for a 49.99% stake in the project. Codelco, the world’s largest copper producer, will retain a controlling interest and oversee the project as part of the Chilean government’s broader effort to expand its presence in the lithium market.
Rio Tinto CEO Jakob Stausholm said the company aims to make a “significant investment” in the region. He also highlighted potential synergies with the nearby Nuevo Cobre copper exploration project, jointly operated with Codelco, which could help reduce environmental impacts such as water use.
The investment will be made in phases: $350 million upon closing, $500 million when a final investment decision is reached, and a final $50 million if commercial production is achieved by the end of 2030.
The project’s governing board will include three members appointed by Codelco and two by Rio Tinto. While Codelco is a dominant force in copper, it is relatively new to lithium production.
Rio Tinto, on the other hand, has an established lithium presence in neighboring Argentina—the fourth-largest lithium producer—following its acquisition of Arcadium. The company is also developing the Rincon lithium project there, which will employ direct lithium extraction (DLE), an emerging and largely untested method that both companies plan to use at Maricunga as well.
Rio Tinto is actively expanding its lithium portfolio through strategic acquisitions and partnerships, positioning itself as a significant player in the global lithium market.
In October 2024, Rio Tinto acquired Arcadium Lithium, a vertically integrated lithium producer, for approximately $6.7 billion. Arcadium’s operations span Argentina, Australia, Canada, the U.S., China, Japan, and the UK, with a current annual production capacity of 75,000 tonnes of lithium carbonate equivalent (LCE). The acquisition aims to more than double this capacity to over 200,000 tonnes per year by 2028 .
Rio Tinto is also developing the Rincon lithium project in Argentina, with an investment of $2.5 billion. The project is expected to produce up to 60,000 tonnes of lithium carbonate annually, marking Rio Tinto’s first commercial lithium operation
Codelco Chairman Maximo Pacheco said the partnership is a key part of the company’s “lithium diversification strategy.” In addition to the Maricunga venture, Codelco is also collaborating with SQM to gain a controlling stake in its operations in the Atacama salt flat.
The lithium market is navigating a complex landscape characterized by price volatility, shifting supply-demand dynamics, and technological advancements.
The partners will fund further capital requirements in line with their share of ownership of the joint venture.
Rio Tinto Chief Executive Jakob Stausholm said: “We are honoured to be chosen as Codelco’s partner to deliver a world class project using Direct Lithium Extraction technology in the Salar de Maricunga, leveraging our expertise as a leading producer of lithium for the global market. Developing this significant lithium resource will deliver further value-adding growth in our portfolio of critical minerals essential for the energy transition.
“Codelco is a strategic partner for Rio Tinto in Chile, with this agreement building on our copper joint ventures. We aim to bring significant investment and long-term benefits to the Atacama region as we advance Maricunga and Nuevo Cobre together, with a focus on responsible sustainable development including shared infrastructure and solutions to minimise water usage.”
Codelco Chairman Máximo Pacheco said: “This project continues our lithium diversification strategy, which is essential for the energy transition, with a world-class partner in Rio Tinto that represents the most attractive option for Codelco and the country. We are happy and proud to strengthen our partnership with a company of Rio Tinto’s prestige, and we warmly welcome it as a partner in this important project for Chile.”
As of the latest trading session, Rio Tinto’s stock is priced at $61.71, reflecting a 1.49% decrease. The company continues to navigate the evolving lithium market, balancing strategic investments with market dynamics.
Lithium prices have experienced a significant decline from their peak in 2022. Spot prices for lithium carbonate have fallen to approximately $10,000 per tonne, down from over $40,000 in 2023 . This downturn is attributed to an oversupplied market, with global production outpacing demand growth. Analysts from S&P Global anticipate a surplus of 33,000 tonnes of lithium carbonate equivalent (LCE) in 2025, a decrease from the 84,000 tonnes surplus in 2024.
Despite the current surplus, some experts foresee a potential market tightening in the coming years. Bernstein forecasts that lithium prices could rise to $20,000 per tonne by 2026 and $25,000 by 2027, driven by slowing supply growth and increasing demand.
In response to declining prices, several high-cost lithium producers have scaled back operations. For instance, Pilbara Minerals and Albemarle have deferred expansion plans and reduced capital expenditures. Conversely, companies like Core Lithium are exploring cost-reduction strategies, such as transitioning to underground mining methods to enhance profitability.
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